Correlation Between Pacific Premier and Eagle Bancorp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Pacific Premier 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 Pacific Premier and Eagle Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Premier Bancorp and Eagle Bancorp, you can compare the effects of market volatilities on Pacific Premier 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 Pacific Premier with a short position of Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Premier and Eagle Bancorp.

Diversification Opportunities for Pacific Premier and Eagle Bancorp

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between Pacific and Eagle is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Premier Bancorp and Eagle Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp and Pacific Premier 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 Pacific Premier Bancorp 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 has no effect on the direction of Pacific Premier i.e., Pacific Premier and Eagle Bancorp go up and down completely randomly.

Pair Corralation between Pacific Premier and Eagle Bancorp

Given the investment horizon of 90 days Pacific Premier Bancorp is expected to generate 0.83 times more return on investment than Eagle Bancorp. However, Pacific Premier Bancorp is 1.2 times less risky than Eagle Bancorp. It trades about 0.01 of its potential returns per unit of risk. Eagle Bancorp is currently generating about 0.0 per unit of risk. If you would invest  3,116  in Pacific Premier Bancorp on August 26, 2024 and sell it today you would lose (243.00) from holding Pacific Premier Bancorp or give up 7.8% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Pacific Premier Bancorp  vs.  Eagle Bancorp

 Performance 
       Timeline  
Pacific Premier Bancorp 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Premier Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, Pacific Premier demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Eagle Bancorp 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Bancorp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Eagle Bancorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pacific Premier and Eagle Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pacific Premier and Eagle Bancorp

The main advantage of trading using opposite Pacific Premier and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Premier 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.
The idea behind Pacific Premier Bancorp and Eagle 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.
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

Other Complementary Tools

Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Technical Analysis
Check basic technical indicators and analysis based on most latest market data