Correlation Between Enterprise Financial and Amerant Bancorp
Can any of the company-specific risk be diversified away by investing in both Enterprise Financial and Amerant Bancorp 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 Financial and Amerant Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enterprise Financial Services and Amerant Bancorp, you can compare the effects of market volatilities on Enterprise Financial and Amerant Bancorp 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 Financial with a short position of Amerant Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and Amerant Bancorp.
Diversification Opportunities for Enterprise Financial and Amerant Bancorp
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Enterprise and Amerant is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services and Amerant Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amerant Bancorp and Enterprise Financial 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 Financial Services are associated (or correlated) with Amerant Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amerant Bancorp has no effect on the direction of Enterprise Financial i.e., Enterprise Financial and Amerant Bancorp go up and down completely randomly.
Pair Corralation between Enterprise Financial and Amerant Bancorp
Given the investment horizon of 90 days Enterprise Financial Services is expected to generate 1.1 times more return on investment than Amerant Bancorp. However, Enterprise Financial is 1.1 times more volatile than Amerant Bancorp. It trades about 0.19 of its potential returns per unit of risk. Amerant Bancorp is currently generating about 0.2 per unit of risk. If you would invest 5,332 in Enterprise Financial Services on August 29, 2024 and sell it today you would earn a total of 812.00 from holding Enterprise Financial Services or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Financial Services vs. Amerant Bancorp
Performance |
| Timeline |
| Enterprise Financial |
| Amerant Bancorp |
Enterprise Financial and Amerant Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Financial and Amerant Bancorp
The main advantage of trading using opposite Enterprise Financial and Amerant Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial position performs unexpectedly, Amerant Bancorp 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 Amerant Bancorp will offset losses from the drop in Amerant Bancorp's long position.| Enterprise Financial vs. Home Federal Bancorp | Enterprise Financial vs. First Financial Northwest | Enterprise Financial vs. First Northwest Bancorp | Enterprise Financial vs. First Capital |
| Amerant Bancorp vs. Affinity Bancshares | Amerant Bancorp vs. Southern California Bancorp | Amerant Bancorp vs. Auburn National Bancorporation | Amerant Bancorp vs. BayCom Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets |