Correlation Between CIT and Enterprise Financial
Can any of the company-specific risk be diversified away by investing in both CIT 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 CIT and Enterprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIT Group and Enterprise Financial Services, you can compare the effects of market volatilities on CIT 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 CIT with a short position of Enterprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIT and Enterprise Financial.
Diversification Opportunities for CIT and Enterprise Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CIT and Enterprise is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CIT Group and Enterprise Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Financial and CIT 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 CIT Group 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 CIT i.e., CIT and Enterprise Financial go up and down completely randomly.
Pair Corralation between CIT and Enterprise Financial
If you would invest 3,920 in Enterprise Financial Services on January 26, 2024 and sell it today you would lose (7.00) from holding Enterprise Financial Services or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
CIT Group vs. Enterprise Financial Services
Performance |
| Timeline |
| CIT Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Enterprise Financial |
CIT and Enterprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIT and Enterprise Financial
The main advantage of trading using opposite CIT and Enterprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIT 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.The idea behind CIT Group and Enterprise Financial Services pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Enterprise Financial vs. Home Bancorp | Enterprise Financial vs. First Community | Enterprise Financial vs. Affinity Bancshares |
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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