Correlation Between Mizuho Financial and Eagle Bancorp
Can any of the company-specific risk be diversified away by investing in both Mizuho Financial and Eagle Bancorp 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 Mizuho Financial and Eagle Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizuho Financial Group and Eagle Bancorp Montana, you can compare the effects of market volatilities on Mizuho Financial and Eagle Bancorp 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 Mizuho Financial with a short position of Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizuho Financial and Eagle Bancorp.
Diversification Opportunities for Mizuho Financial and Eagle Bancorp
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mizuho and Eagle is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mizuho Financial Group and Eagle Bancorp Montana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp Montana and Mizuho Financial 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 Mizuho Financial Group are associated (or correlated) with Eagle Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bancorp Montana has no effect on the direction of Mizuho Financial i.e., Mizuho Financial and Eagle Bancorp go up and down completely randomly.
Pair Corralation between Mizuho Financial and Eagle Bancorp
Considering the 90-day investment horizon Mizuho Financial Group is expected to under-perform the Eagle Bancorp. In addition to that, Mizuho Financial is 1.89 times more volatile than Eagle Bancorp Montana. It trades about -0.09 of its total potential returns per unit of risk. Eagle Bancorp Montana is currently generating about -0.01 per unit of volatility. If you would invest 1,272 in Eagle Bancorp Montana on January 26, 2024 and sell it today you would lose (2.00) from holding Eagle Bancorp Montana or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizuho Financial Group vs. Eagle Bancorp Montana
Performance |
| Timeline |
| Mizuho Financial |
| Eagle Bancorp Montana |
Mizuho Financial and Eagle Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizuho Financial and Eagle Bancorp
The main advantage of trading using opposite Mizuho Financial and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizuho Financial position performs unexpectedly, Eagle Bancorp 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 Bancorp will offset losses from the drop in Eagle Bancorp's long position.| Mizuho Financial vs. CrossFirst Bankshares | Mizuho Financial vs. Banco Bradesco SA | Mizuho Financial vs. CF Bankshares | Mizuho Financial vs. Foreign Trade Bank |
Check out your portfolio center.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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