Correlation Between Enterprise Bancorp and Banco Macro
Can any of the company-specific risk be diversified away by investing in both Enterprise Bancorp and Banco Macro 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 Banco Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enterprise Bancorp and Banco Macro SA, you can compare the effects of market volatilities on Enterprise Bancorp and Banco Macro 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 Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Bancorp and Banco Macro.
Diversification Opportunities for Enterprise Bancorp and Banco Macro
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enterprise and Banco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Bancorp and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA 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 Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Enterprise Bancorp i.e., Enterprise Bancorp and Banco Macro go up and down completely randomly.
Pair Corralation between Enterprise Bancorp and Banco Macro
Given the investment horizon of 90 days Enterprise Bancorp is expected to generate 1.23 times more return on investment than Banco Macro. However, Enterprise Bancorp is 1.23 times more volatile than Banco Macro SA. It trades about 0.21 of its potential returns per unit of risk. Banco Macro SA is currently generating about 0.05 per unit of risk. If you would invest 3,236 in Enterprise Bancorp on August 27, 2024 and sell it today you would earn a total of 506.00 from holding Enterprise Bancorp or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Bancorp vs. Banco Macro SA
Performance |
| Timeline |
| Enterprise Bancorp |
| Banco Macro SA |
Enterprise Bancorp and Banco Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Bancorp and Banco Macro
The main advantage of trading using opposite Enterprise Bancorp and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Bancorp position performs unexpectedly, Banco Macro 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 Banco Macro will offset losses from the drop in Banco Macro's long position.| Enterprise Bancorp vs. Fifth Third Bancorp | Enterprise Bancorp vs. Zions Bancorporation | Enterprise Bancorp vs. Huntington Bancshares Incorporated | Enterprise Bancorp vs. Comerica |
| Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. BBVA Banco Frances | Banco Macro vs. Banco Bradesco SA | Banco Macro vs. Itau Unibanco Banco |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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