Correlation Between LCNB and Eagle Financial

Can any of the company-specific risk be diversified away by investing in both LCNB and Eagle Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LCNB and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LCNB Corporation and Eagle Financial Bancorp, you can compare the effects of market volatilities on LCNB and Eagle Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LCNB with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LCNB and Eagle Financial.

Diversification Opportunities for LCNB and Eagle Financial

0.0

Correlation Coefficient

LCNB  Eagle Financial

Pay attention - limited upside

The 3 months correlation between LCNB and Eagle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LCNB Corp. and Eagle Financial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Bancorp and LCNB is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LCNB Corporation are associated (or correlated) with Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Bancorp has no effect on the direction of LCNB i.e., LCNB and Eagle Financial go up and down completely randomly.

Pair Corralation between LCNB and Eagle Financial

If you would invest  1,810  in Eagle Financial Bancorp on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Eagle Financial Bancorp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

LCNB Corp.  vs.  Eagle Financial Bancorp

LCNB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LCNB Corporation are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, LCNB is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Eagle Financial Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eagle Financial Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Eagle Financial is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with LCNB and Eagle Financial

The main advantage of trading using opposite LCNB and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LCNB position performs unexpectedly, Eagle Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eagle Financial will offset losses from the drop in Eagle Financial's long position.

The idea behind LCNB Corporation and Eagle Financial Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.