Correlation Between Customers Bancorp and Enova International
Can any of the company-specific risk be diversified away by investing in both Customers Bancorp and Enova International 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 Customers Bancorp and Enova International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Customers Bancorp and Enova International, you can compare the effects of market volatilities on Customers Bancorp and Enova International 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 Customers Bancorp with a short position of Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Customers Bancorp and Enova International.
Diversification Opportunities for Customers Bancorp and Enova International
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Customers and Enova is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Customers Bancorp and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International and Customers 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 Customers Bancorp are associated (or correlated) with Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Customers Bancorp i.e., Customers Bancorp and Enova International go up and down completely randomly.
Pair Corralation between Customers Bancorp and Enova International
Given the investment horizon of 90 days Customers Bancorp is expected to generate 1.85 times more return on investment than Enova International. However, Customers Bancorp is 1.85 times more volatile than Enova International. It trades about 0.2 of its potential returns per unit of risk. Enova International is currently generating about 0.26 per unit of risk. If you would invest 4,560 in Customers Bancorp on August 24, 2024 and sell it today you would earn a total of 968.00 from holding Customers Bancorp or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Customers Bancorp vs. Enova International
Performance |
| Timeline |
| Customers Bancorp |
| Enova International |
Customers Bancorp and Enova International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Customers Bancorp and Enova International
The main advantage of trading using opposite Customers Bancorp and Enova International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Customers Bancorp position performs unexpectedly, Enova International 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 Enova International will offset losses from the drop in Enova International's long position.| Customers Bancorp vs. Glacier Bancorp | Customers Bancorp vs. Capitol Federal Financial | Customers Bancorp vs. Byline Bancorp | Customers Bancorp vs. Cathay General Bancorp |
| Enova International vs. Regional Management Corp | Enova International vs. Encore Capital Group | Enova International vs. Customers Bancorp | Enova International vs. Employers Holdings |
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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