Correlation Between Enterprise Financial and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both Enterprise Financial and CrossFirst Bankshares 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 CrossFirst Bankshares 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 CrossFirst Bankshares, you can compare the effects of market volatilities on Enterprise Financial and CrossFirst Bankshares 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 CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and CrossFirst Bankshares.
Diversification Opportunities for Enterprise Financial and CrossFirst Bankshares
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enterprise and CrossFirst is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares 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 CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of Enterprise Financial i.e., Enterprise Financial and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between Enterprise Financial and CrossFirst Bankshares
Given the investment horizon of 90 days Enterprise Financial Services is expected to generate 1.01 times more return on investment than CrossFirst Bankshares. However, Enterprise Financial is 1.01 times more volatile than CrossFirst Bankshares. It trades about 0.18 of its potential returns per unit of risk. CrossFirst Bankshares is currently generating about 0.18 per unit of risk. If you would invest 5,310 in Enterprise Financial Services on August 25, 2024 and sell it today you would earn a total of 764.00 from holding Enterprise Financial Services or generate 14.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Financial Services vs. CrossFirst Bankshares
Performance |
| Timeline |
| Enterprise Financial |
| CrossFirst Bankshares |
Enterprise Financial and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Financial and CrossFirst Bankshares
The main advantage of trading using opposite Enterprise Financial and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' 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 |
| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
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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