Correlation Between Enterprise Financial and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both Enterprise Financial and Citizens 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 Citizens 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 Citizens Bancorp Investment, you can compare the effects of market volatilities on Enterprise Financial and Citizens 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 Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and Citizens Bancorp.
Diversification Opportunities for Enterprise Financial and Citizens Bancorp
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enterprise and Citizens is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services and Citizens Bancorp Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancorp Inv 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 Citizens Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancorp Inv has no effect on the direction of Enterprise Financial i.e., Enterprise Financial and Citizens Bancorp go up and down completely randomly.
Pair Corralation between Enterprise Financial and Citizens Bancorp
Given the investment horizon of 90 days Enterprise Financial Services is expected to generate 1.41 times more return on investment than Citizens Bancorp. However, Enterprise Financial is 1.41 times more volatile than Citizens Bancorp Investment. It trades about 0.1 of its potential returns per unit of risk. Citizens Bancorp Investment is currently generating about -0.06 per unit of risk. If you would invest 3,827 in Enterprise Financial Services on August 26, 2024 and sell it today you would earn a total of 2,247 from holding Enterprise Financial Services or generate 58.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Financial Services vs. Citizens Bancorp Investment
Performance |
| Timeline |
| Enterprise Financial |
| Citizens Bancorp Inv |
Enterprise Financial and Citizens Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Financial and Citizens Bancorp
The main advantage of trading using opposite Enterprise Financial and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial position performs unexpectedly, Citizens 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 Citizens Bancorp will offset losses from the drop in Citizens 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 |
| Citizens Bancorp vs. Standard Bank Group | Citizens Bancorp vs. PSB Holdings | Citizens Bancorp vs. United Overseas Bank | Citizens Bancorp vs. Turkiye Garanti Bankasi |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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