Correlation Between Enterprise Financial and Citizens Holding
Can any of the company-specific risk be diversified away by investing in both Enterprise Financial and Citizens Holding 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 Holding 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 Holding, you can compare the effects of market volatilities on Enterprise Financial and Citizens Holding 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 Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and Citizens Holding.
Diversification Opportunities for Enterprise Financial and Citizens Holding
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enterprise and Citizens is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services and Citizens Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Holding 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 Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Holding has no effect on the direction of Enterprise Financial i.e., Enterprise Financial and Citizens Holding go up and down completely randomly.
Pair Corralation between Enterprise Financial and Citizens Holding
Given the investment horizon of 90 days Enterprise Financial Services is expected to generate 0.89 times more return on investment than Citizens Holding. However, Enterprise Financial Services is 1.12 times less risky than Citizens Holding. It trades about 0.04 of its potential returns per unit of risk. Citizens Holding is currently generating about -0.02 per unit of risk. If you would invest 4,636 in Enterprise Financial Services on August 28, 2024 and sell it today you would earn a total of 1,502 from holding Enterprise Financial Services or generate 32.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
Enterprise Financial Services vs. Citizens Holding
Performance |
| Timeline |
| Enterprise Financial |
| Citizens Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Enterprise Financial and Citizens Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Financial and Citizens Holding
The main advantage of trading using opposite Enterprise Financial and Citizens Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial position performs unexpectedly, Citizens Holding 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 Holding will offset losses from the drop in Citizens Holding's long position.| Enterprise Financial vs. Fifth Third Bancorp | Enterprise Financial vs. Zions Bancorporation | Enterprise Financial vs. Huntington Bancshares Incorporated | Enterprise Financial vs. Comerica |
| Citizens Holding vs. Home Federal Bancorp | Citizens Holding vs. Lake Shore Bancorp | Citizens Holding vs. Community West Bancshares | Citizens Holding vs. Magyar 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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