Correlation Between First Community and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both First Community 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 First Community and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community and Eagle Financial Services, you can compare the effects of market volatilities on First Community 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 First Community with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and Eagle Financial.
Diversification Opportunities for First Community and Eagle Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Eagle is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding First Community 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 First Community 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 First Community 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 First Community i.e., First Community and Eagle Financial go up and down completely randomly.
Pair Corralation between First Community and Eagle Financial
Given the investment horizon of 90 days First Community is expected to generate 0.96 times more return on investment than Eagle Financial. However, First Community is 1.04 times less risky than Eagle Financial. It trades about 0.09 of its potential returns per unit of risk. Eagle Financial Services is currently generating about 0.06 per unit of risk. If you would invest 2,561 in First Community on August 15, 2025 and sell it today you would earn a total of 189.00 from holding First Community or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Community vs. Eagle Financial Services
Performance |
| Timeline |
| First Community |
| Eagle Financial Services |
First Community and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Community and Eagle Financial
The main advantage of trading using opposite First Community and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community 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.| First Community vs. Avidbank Holdings, Common | First Community vs. Virginia National Bankshares | First Community vs. First Savings Financial | First Community vs. Franklin Financial Services |
| Eagle Financial vs. National Bankshares | Eagle Financial vs. Chain Bridge Bancorp, | Eagle Financial vs. First Community | Eagle Financial vs. Franklin Financial Services |
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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