Correlation Between Enterprise Financial and Republic Bancorp
Can any of the company-specific risk be diversified away by investing in both Enterprise Financial and Republic 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 Republic 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 Republic Bancorp, you can compare the effects of market volatilities on Enterprise Financial and Republic 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 Republic Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and Republic Bancorp.
Diversification Opportunities for Enterprise Financial and Republic Bancorp
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Enterprise and Republic is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services and Republic Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Republic 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 Republic Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Republic Bancorp has no effect on the direction of Enterprise Financial i.e., Enterprise Financial and Republic Bancorp go up and down completely randomly.
Pair Corralation between Enterprise Financial and Republic Bancorp
Given the investment horizon of 90 days Enterprise Financial is expected to generate 1.28 times less return on investment than Republic Bancorp. But when comparing it to its historical volatility, Enterprise Financial Services is 1.03 times less risky than Republic Bancorp. It trades about 0.12 of its potential returns per unit of risk. Republic Bancorp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,267 in Republic Bancorp on August 31, 2024 and sell it today you would earn a total of 1,469 from holding Republic Bancorp or generate 23.44% 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. Republic Bancorp
Performance |
| Timeline |
| Enterprise Financial |
| Republic Bancorp |
Enterprise Financial and Republic Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Financial and Republic Bancorp
The main advantage of trading using opposite Enterprise Financial and Republic Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial position performs unexpectedly, Republic 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 Republic Bancorp will offset losses from the drop in Republic 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 |
| Republic Bancorp vs. First Community | Republic Bancorp vs. Community West Bancshares | Republic Bancorp vs. First Financial Northwest | Republic Bancorp vs. First Northwest 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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