Correlation Between Eagle Bancorp and BBVA Banco

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

By analyzing existing cross correlation between Eagle Bancorp Montana and BBVA Banco Frances, you can compare the effects of market volatilities on Eagle Bancorp and BBVA Banco 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 Eagle Bancorp with a short position of BBVA Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and BBVA Banco.

Diversification Opportunities for Eagle Bancorp and BBVA Banco

0.38

Correlation Coefficient

Eagle Bancorp  BBVA Banco

Weak diversification

The 3 months correlation between Eagle and BBVA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and BBVA Banco Frances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBVA Banco Frances and Eagle Bancorp 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 Eagle Bancorp Montana are associated (or correlated) with BBVA Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBVA Banco Frances has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and BBVA Banco go up and down completely randomly.

Pair Corralation between Eagle Bancorp and BBVA Banco

Given the investment horizon of 90 days Eagle Bancorp Montana is expected to generate 0.47 times more return on investment than BBVA Banco. However, Eagle Bancorp Montana is 2.12 times less risky than BBVA Banco. It trades about -0.1 of its potential returns per unit of risk. BBVA Banco Frances is currently generating about -0.09 per unit of risk. If you would invest  1,759  in Eagle Bancorp Montana on May 7, 2025 and sell it today you would lose (168.00) from holding Eagle Bancorp Montana or give up 9.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eagle Bancorp Montana  vs.  BBVA Banco Frances

Eagle Bancorp Montana

Risk-Adjusted Performance

Weakest

Over the last 90 days Eagle Bancorp Montana has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

BBVA Banco Frances

Risk-Adjusted Performance

Weakest

Over the last 90 days BBVA Banco Frances has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Eagle Bancorp and BBVA Banco

The main advantage of trading using opposite Eagle Bancorp and BBVA Banco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, BBVA Banco 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 BBVA Banco will offset losses from the drop in BBVA Banco's long position.

The idea behind Eagle Bancorp Montana and BBVA Banco Frances 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.