Correlation Between ENB Financial and CCFNB Bancorp
Can any of the company-specific risk be diversified away by investing in both ENB Financial and CCFNB 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 ENB Financial and CCFNB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENB Financial Corp and CCFNB Bancorp, you can compare the effects of market volatilities on ENB Financial and CCFNB 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 ENB Financial with a short position of CCFNB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENB Financial and CCFNB Bancorp.
Diversification Opportunities for ENB Financial and CCFNB Bancorp
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ENB and CCFNB is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding ENB Financial Corp and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp and ENB 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 ENB Financial Corp are associated (or correlated) with CCFNB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCFNB Bancorp has no effect on the direction of ENB Financial i.e., ENB Financial and CCFNB Bancorp go up and down completely randomly.
Pair Corralation between ENB Financial and CCFNB Bancorp
Given the investment horizon of 90 days ENB Financial Corp is expected to generate 0.77 times more return on investment than CCFNB Bancorp. However, ENB Financial Corp is 1.3 times less risky than CCFNB Bancorp. It trades about 0.02 of its potential returns per unit of risk. CCFNB Bancorp is currently generating about 0.01 per unit of risk. If you would invest 1,726 in ENB Financial Corp on August 29, 2024 and sell it today you would earn a total of 99.00 from holding ENB Financial Corp or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.89% |
| Values | Daily Returns |
ENB Financial Corp vs. CCFNB Bancorp
Performance |
| Timeline |
| ENB Financial Corp |
| CCFNB Bancorp |
ENB Financial and CCFNB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENB Financial and CCFNB Bancorp
The main advantage of trading using opposite ENB Financial and CCFNB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENB Financial position performs unexpectedly, CCFNB 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 CCFNB Bancorp will offset losses from the drop in CCFNB Bancorp's long position.| ENB Financial vs. Potomac Bancshares | ENB Financial vs. Apollo Bancorp | ENB Financial vs. The Farmers Bank | ENB Financial vs. 1ST SUMMIT BANCORP |
| CCFNB Bancorp vs. Susquehanna Community Financial | CCFNB Bancorp vs. Mifflinburg Bancorp | CCFNB Bancorp vs. Woodlands Financial Services | CCFNB Bancorp vs. Penns Woods 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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