Correlation Between LINKBANCORP and Enterprise Financial
Can any of the company-specific risk be diversified away by investing in both LINKBANCORP and Enterprise 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 LINKBANCORP and Enterprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LINKBANCORP and Enterprise Financial Services, you can compare the effects of market volatilities on LINKBANCORP and Enterprise 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 LINKBANCORP with a short position of Enterprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LINKBANCORP and Enterprise Financial.
Diversification Opportunities for LINKBANCORP and Enterprise Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LINKBANCORP and Enterprise is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and Enterprise Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Financial and LINKBANCORP 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 LINKBANCORP are associated (or correlated) with Enterprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enterprise Financial has no effect on the direction of LINKBANCORP i.e., LINKBANCORP and Enterprise Financial go up and down completely randomly.
Pair Corralation between LINKBANCORP and Enterprise Financial
Given the investment horizon of 90 days LINKBANCORP is expected to under-perform the Enterprise Financial. But the stock apears to be less risky and, when comparing its historical volatility, LINKBANCORP is 1.12 times less risky than Enterprise Financial. The stock trades about -0.17 of its potential returns per unit of risk. The Enterprise Financial Services is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,650 in Enterprise Financial Services on October 23, 2024 and sell it today you would earn a total of 126.00 from holding Enterprise Financial Services or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LINKBANCORP vs. Enterprise Financial Services
Performance |
| Timeline |
| LINKBANCORP |
| Enterprise Financial |
LINKBANCORP and Enterprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LINKBANCORP and Enterprise Financial
The main advantage of trading using opposite LINKBANCORP and Enterprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LINKBANCORP position performs unexpectedly, Enterprise 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 Enterprise Financial will offset losses from the drop in Enterprise Financial's long position.| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP vs. Magyar Bancorp |
| Enterprise Financial vs. Home Federal Bancorp | Enterprise Financial vs. First Financial Northwest | Enterprise Financial vs. First Northwest Bancorp | Enterprise Financial vs. First Capital |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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