Correlation Between Enterprise Bancorp and Flushing Financial
Can any of the company-specific risk be diversified away by investing in both Enterprise Bancorp and Flushing 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 Enterprise Bancorp and Flushing Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enterprise Bancorp and Flushing Financial, you can compare the effects of market volatilities on Enterprise Bancorp and Flushing 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 Enterprise Bancorp with a short position of Flushing Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Bancorp and Flushing Financial.
Diversification Opportunities for Enterprise Bancorp and Flushing Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enterprise and Flushing is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Bancorp and Flushing Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flushing Financial and Enterprise Bancorp 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 Bancorp are associated (or correlated) with Flushing Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flushing Financial has no effect on the direction of Enterprise Bancorp i.e., Enterprise Bancorp and Flushing Financial go up and down completely randomly.
Pair Corralation between Enterprise Bancorp and Flushing Financial
Given the investment horizon of 90 days Enterprise Bancorp is expected to under-perform the Flushing Financial. But the stock apears to be less risky and, when comparing its historical volatility, Enterprise Bancorp is 1.49 times less risky than Flushing Financial. The stock trades about -0.02 of its potential returns per unit of risk. The Flushing Financial is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,244 in Flushing Financial on January 19, 2024 and sell it today you would lose (111.00) from holding Flushing Financial or give up 8.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Bancorp vs. Flushing Financial
Performance |
| Timeline |
| Enterprise Bancorp |
| Flushing Financial |
Enterprise Bancorp and Flushing Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Bancorp and Flushing Financial
The main advantage of trading using opposite Enterprise Bancorp and Flushing Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Bancorp position performs unexpectedly, Flushing 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 Flushing Financial will offset losses from the drop in Flushing Financial's long position.| Enterprise Bancorp vs. Cullman Bancorp | Enterprise Bancorp vs. HMN Financial | Enterprise Bancorp vs. Home Federal Bancorp | Enterprise Bancorp vs. First Northwest Bancorp |
| Flushing Financial vs. Independent Bank | Flushing Financial vs. First Financial Bancorp | Flushing Financial vs. Lakeland Financial | Flushing Financial vs. National Bank Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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