Correlation Between Enterprise Bancorp and Hancock Whitney
Can any of the company-specific risk be diversified away by investing in both Enterprise Bancorp and Hancock Whitney 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 Hancock Whitney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enterprise Bancorp and Hancock Whitney Corp, you can compare the effects of market volatilities on Enterprise Bancorp and Hancock Whitney 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 Hancock Whitney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Bancorp and Hancock Whitney.
Diversification Opportunities for Enterprise Bancorp and Hancock Whitney
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Enterprise and Hancock is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Bancorp and Hancock Whitney Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney Corp 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 Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney Corp has no effect on the direction of Enterprise Bancorp i.e., Enterprise Bancorp and Hancock Whitney go up and down completely randomly.
Pair Corralation between Enterprise Bancorp and Hancock Whitney
Given the investment horizon of 90 days Enterprise Bancorp is expected to generate 1.09 times more return on investment than Hancock Whitney. However, Enterprise Bancorp is 1.09 times more volatile than Hancock Whitney Corp. It trades about 0.01 of its potential returns per unit of risk. Hancock Whitney Corp is currently generating about -0.24 per unit of risk. If you would invest 4,246 in Enterprise Bancorp on November 27, 2024 and sell it today you would lose (1.00) from holding Enterprise Bancorp or give up 0.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Bancorp vs. Hancock Whitney Corp
Performance |
| Timeline |
| Enterprise Bancorp |
| Hancock Whitney Corp |
Enterprise Bancorp and Hancock Whitney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Bancorp and Hancock Whitney
The main advantage of trading using opposite Enterprise Bancorp and Hancock Whitney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Bancorp position performs unexpectedly, Hancock Whitney 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 Hancock Whitney will offset losses from the drop in Hancock Whitney'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 |
| Hancock Whitney vs. Home Bancorp | Hancock Whitney vs. First Business Financial | Hancock Whitney vs. LINKBANCORP | Hancock Whitney 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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