Correlation Between ENB Financial and Woodlands Financial
Can any of the company-specific risk be diversified away by investing in both ENB Financial and Woodlands Financial 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 Woodlands Financial 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 Woodlands Financial Services, you can compare the effects of market volatilities on ENB Financial and Woodlands Financial 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 Woodlands Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENB Financial and Woodlands Financial.
Diversification Opportunities for ENB Financial and Woodlands Financial
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ENB and Woodlands is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ENB Financial Corp and Woodlands Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodlands Financial 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 Woodlands Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodlands Financial has no effect on the direction of ENB Financial i.e., ENB Financial and Woodlands Financial go up and down completely randomly.
Pair Corralation between ENB Financial and Woodlands Financial
Given the investment horizon of 90 days ENB Financial Corp is expected to generate 0.95 times more return on investment than Woodlands Financial. However, ENB Financial Corp is 1.05 times less risky than Woodlands Financial. It trades about 0.08 of its potential returns per unit of risk. Woodlands Financial Services is currently generating about 0.03 per unit of risk. If you would invest 1,234 in ENB Financial Corp on August 26, 2024 and sell it today you would earn a total of 541.00 from holding ENB Financial Corp or generate 43.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.39% |
| Values | Daily Returns |
ENB Financial Corp vs. Woodlands Financial Services
Performance |
| Timeline |
| ENB Financial Corp |
| Woodlands Financial |
ENB Financial and Woodlands Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENB Financial and Woodlands Financial
The main advantage of trading using opposite ENB Financial and Woodlands Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENB Financial position performs unexpectedly, Woodlands Financial 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 Woodlands Financial will offset losses from the drop in Woodlands Financial's long position.| ENB Financial vs. Invesco High Income | ENB Financial vs. Blackrock Muniholdings Ny | ENB Financial vs. MFS Investment Grade | ENB Financial vs. Federated Premier Municipal |
| Woodlands Financial vs. Eastern Michigan Financial | Woodlands Financial vs. Commercial National Financial | Woodlands Financial vs. Mifflinburg Bancorp | Woodlands Financial vs. Apollo 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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