Correlation Between Enservco and First Internet
Can any of the company-specific risk be diversified away by investing in both Enservco and First Internet 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 Enservco and First Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enservco Co and First Internet Bancorp, you can compare the effects of market volatilities on Enservco and First Internet 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 Enservco with a short position of First Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enservco and First Internet.
Diversification Opportunities for Enservco and First Internet
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enservco and First is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Enservco Co and First Internet Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Internet Bancorp and Enservco 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 Enservco Co are associated (or correlated) with First Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Internet Bancorp has no effect on the direction of Enservco i.e., Enservco and First Internet go up and down completely randomly.
Pair Corralation between Enservco and First Internet
Given the investment horizon of 90 days Enservco Co is expected to under-perform the First Internet. In addition to that, Enservco is 15.36 times more volatile than First Internet Bancorp. It trades about -0.11 of its total potential returns per unit of risk. First Internet Bancorp is currently generating about 0.09 per unit of volatility. If you would invest 2,440 in First Internet Bancorp on August 28, 2024 and sell it today you would earn a total of 84.00 from holding First Internet Bancorp or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 79.69% |
| Values | Daily Returns |
Enservco Co vs. First Internet Bancorp
Performance |
| Timeline |
| Enservco |
| First Internet Bancorp |
Enservco and First Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enservco and First Internet
The main advantage of trading using opposite Enservco and First Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enservco position performs unexpectedly, First Internet 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 First Internet will offset losses from the drop in First Internet's long position.| Enservco vs. Houston American Energy | Enservco vs. Indonesia Energy | Enservco vs. Imperial Petroleum | Enservco vs. Nine Energy Service |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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