Correlation Between SWK Holdings and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both SWK Holdings 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 SWK Holdings and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWK Holdings Corp and Eagle Financial Services, you can compare the effects of market volatilities on SWK Holdings 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 SWK Holdings with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWK Holdings and Eagle Financial.
Diversification Opportunities for SWK Holdings and Eagle Financial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SWK and Eagle is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SWK Holdings Corp 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 SWK Holdings 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 SWK Holdings Corp 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 SWK Holdings i.e., SWK Holdings and Eagle Financial go up and down completely randomly.
Pair Corralation between SWK Holdings and Eagle Financial
Given the investment horizon of 90 days SWK Holdings is expected to generate 1.52 times less return on investment than Eagle Financial. But when comparing it to its historical volatility, SWK Holdings Corp is 1.52 times less risky than Eagle Financial. It trades about 0.21 of its potential returns per unit of risk. Eagle Financial Services is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,571 in Eagle Financial Services on September 2, 2025 and sell it today you would earn a total of 223.00 from holding Eagle Financial Services or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
SWK Holdings Corp vs. Eagle Financial Services
Performance |
| Timeline |
| SWK Holdings Corp |
| Eagle Financial Services |
SWK Holdings and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWK Holdings and Eagle Financial
The main advantage of trading using opposite SWK Holdings and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWK Holdings 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.| SWK Holdings vs. Burlington Stores | SWK Holdings vs. Plaza Retail REIT | SWK Holdings vs. Robinsons Retail Holdings | SWK Holdings vs. Summit Hotel Properties |
| Eagle Financial vs. Slate Office REIT | Eagle Financial vs. BCP Investment Corp | Eagle Financial vs. PennyMac Mortgage Investment | Eagle Financial vs. Quality One Wireless |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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