Correlation Between John Marshall and ECB Bancorp

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

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

Diversification Opportunities for John Marshall and ECB Bancorp

-0.02

Correlation Coefficient

John Marshall  ECB Bancorp

Good diversification

The 3 months correlation between John and ECB is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding John Marshall Bancorp and ECB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECB Bancorp and John Marshall 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 John Marshall Bancorp are associated (or correlated) with ECB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECB Bancorp has no effect on the direction of John Marshall i.e., John Marshall and ECB Bancorp go up and down completely randomly.

Pair Corralation between John Marshall and ECB Bancorp

Given the investment horizon of 90 days John Marshall Bancorp is expected to generate 1.07 times more return on investment than ECB Bancorp. However, John Marshall is 1.07 times more volatile than ECB Bancorp. It trades about 0.12 of its potential returns per unit of risk. ECB Bancorp is currently generating about -0.07 per unit of risk. If you would invest  1,663  in John Marshall Bancorp on May 3, 2025 and sell it today you would earn a total of  185.00  from holding John Marshall Bancorp or generate 11.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

John Marshall Bancorp  vs.  ECB Bancorp

John Marshall Bancorp

Risk-Adjusted Performance

OK

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

ECB Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ECB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, ECB Bancorp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with John Marshall and ECB Bancorp

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

The idea behind John Marshall Bancorp and ECB 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.