Correlation Between Enterprise Financial and Pathfinder Bancorp
Can any of the company-specific risk be diversified away by investing in both Enterprise Financial and Pathfinder 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 Pathfinder 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 Pathfinder Bancorp, you can compare the effects of market volatilities on Enterprise Financial and Pathfinder 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 Pathfinder Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and Pathfinder Bancorp.
Diversification Opportunities for Enterprise Financial and Pathfinder Bancorp
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Enterprise and Pathfinder is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services and Pathfinder Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pathfinder 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 Pathfinder Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pathfinder Bancorp has no effect on the direction of Enterprise Financial i.e., Enterprise Financial and Pathfinder Bancorp go up and down completely randomly.
Pair Corralation between Enterprise Financial and Pathfinder Bancorp
Assuming the 90 days horizon Enterprise Financial Services is expected to under-perform the Pathfinder Bancorp. But the preferred stock apears to be less risky and, when comparing its historical volatility, Enterprise Financial Services is 2.37 times less risky than Pathfinder Bancorp. The preferred stock trades about -0.1 of its potential returns per unit of risk. The Pathfinder Bancorp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,810 in Pathfinder Bancorp on August 28, 2024 and sell it today you would lose (28.00) from holding Pathfinder Bancorp or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Financial Services vs. Pathfinder Bancorp
Performance |
| Timeline |
| Enterprise Financial |
| Pathfinder Bancorp |
Enterprise Financial and Pathfinder Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Financial and Pathfinder Bancorp
The main advantage of trading using opposite Enterprise Financial and Pathfinder Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial position performs unexpectedly, Pathfinder 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 Pathfinder Bancorp will offset losses from the drop in Pathfinder Bancorp's long position.| Enterprise Financial vs. Capital One Financial | Enterprise Financial vs. Capital One Financial | Enterprise Financial vs. Bank of America |
| Pathfinder Bancorp vs. Home Federal Bancorp | Pathfinder Bancorp vs. Lake Shore Bancorp | Pathfinder Bancorp vs. Magyar Bancorp | Pathfinder Bancorp 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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