Correlation Between Community Heritage and Eagle Financial

Can any of the company-specific risk be diversified away by investing in both Community Heritage 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 Community Heritage and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Community Heritage Financial and Eagle Financial Services, you can compare the effects of market volatilities on Community Heritage 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 Community Heritage with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community Heritage and Eagle Financial.

Diversification Opportunities for Community Heritage and Eagle Financial

0.49

Correlation Coefficient

Community Heritage  Eagle Financial

Very weak diversification

The 3 months correlation between Community and Eagle is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Community Heritage Financial and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services and Community Heritage 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 Community Heritage Financial 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 Services has no effect on the direction of Community Heritage i.e., Community Heritage and Eagle Financial go up and down completely randomly.

Pair Corralation between Community Heritage and Eagle Financial

Given the investment horizon of 90 days Community Heritage is expected to generate 1.08 times less return on investment than Eagle Financial. But when comparing it to its historical volatility, Community Heritage Financial is 1.64 times less risky than Eagle Financial. It trades about 0.19 of its potential returns per unit of risk. Eagle Financial Services is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,130  in Eagle Financial Services on May 21, 2025 and sell it today you would earn a total of  352.00  from holding Eagle Financial Services or generate 11.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Community Heritage Financial  vs.  Eagle Financial Services

Community Heritage

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Community Heritage Financial are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical indicators, Community Heritage may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Eagle Financial Services

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Financial Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Eagle Financial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Community Heritage and Eagle Financial

The main advantage of trading using opposite Community Heritage and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community Heritage 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 Community Heritage Financial and Eagle Financial Services 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.