Correlation Between Enterprise Bancorp and Atlantic Union
Can any of the company-specific risk be diversified away by investing in both Enterprise Bancorp and Atlantic Union 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 Enterprise Bancorp and Atlantic Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enterprise Bancorp and Atlantic Union Bankshares, you can compare the effects of market volatilities on Enterprise Bancorp and Atlantic Union 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 Enterprise Bancorp with a short position of Atlantic Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Bancorp and Atlantic Union.
Diversification Opportunities for Enterprise Bancorp and Atlantic Union
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Enterprise and Atlantic is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Bancorp and Atlantic Union Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Union Bankshares and Enterprise 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 Enterprise Bancorp are associated (or correlated) with Atlantic Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Union Bankshares has no effect on the direction of Enterprise Bancorp i.e., Enterprise Bancorp and Atlantic Union go up and down completely randomly.
Pair Corralation between Enterprise Bancorp and Atlantic Union
Given the investment horizon of 90 days Enterprise Bancorp is expected to generate 1.07 times less return on investment than Atlantic Union. In addition to that, Enterprise Bancorp is 1.08 times more volatile than Atlantic Union Bankshares. It trades about 0.06 of its total potential returns per unit of risk. Atlantic Union Bankshares is currently generating about 0.07 per unit of volatility. If you would invest 3,184 in Atlantic Union Bankshares on September 2, 2024 and sell it today you would earn a total of 1,059 from holding Atlantic Union Bankshares or generate 33.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Bancorp vs. Atlantic Union Bankshares
Performance |
| Timeline |
| Enterprise Bancorp |
| Atlantic Union Bankshares |
Enterprise Bancorp and Atlantic Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Bancorp and Atlantic Union
The main advantage of trading using opposite Enterprise Bancorp and Atlantic Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Bancorp position performs unexpectedly, Atlantic Union 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 Atlantic Union will offset losses from the drop in Atlantic Union's long position.| Enterprise Bancorp vs. Home Federal Bancorp | Enterprise Bancorp vs. First Northwest Bancorp | Enterprise Bancorp vs. Community West Bancshares | Enterprise Bancorp vs. First Financial Northwest |
| Atlantic Union vs. Home Bancorp | Atlantic Union vs. Community West Bancshares | Atlantic Union vs. First Community | Atlantic Union vs. Great Southern Bancorp |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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