Correlation Between Enterprise Financial and Flushing Financial
Can any of the company-specific risk be diversified away by investing in both Enterprise Financial 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 Financial 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 Financial Services and Flushing Financial, you can compare the effects of market volatilities on Enterprise Financial 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 Financial with a short position of Flushing Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and Flushing Financial.
Diversification Opportunities for Enterprise Financial and Flushing Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enterprise and Flushing is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services and Flushing Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flushing Financial and Enterprise 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 Enterprise Financial Services 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 Financial i.e., Enterprise Financial and Flushing Financial go up and down completely randomly.
Pair Corralation between Enterprise Financial and Flushing Financial
Given the investment horizon of 90 days Enterprise Financial is expected to generate 4.0 times less return on investment than Flushing Financial. But when comparing it to its historical volatility, Enterprise Financial Services is 1.72 times less risky than Flushing Financial. It trades about 0.0 of its potential returns per unit of risk. Flushing Financial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,173 in Flushing Financial on January 26, 2024 and sell it today you would lose (5.00) from holding Flushing Financial or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Financial Services vs. Flushing Financial
Performance |
| Timeline |
| Enterprise Financial |
| Flushing Financial |
Enterprise Financial and Flushing Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Financial and Flushing Financial
The main advantage of trading using opposite Enterprise Financial and Flushing Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial 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 Financial vs. HMN Financial | Enterprise Financial vs. Home Federal Bancorp | Enterprise Financial vs. First Financial Northwest | Enterprise Financial 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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