Correlation Between Eagle Financial and Enterprise Financial
Can any of the company-specific risk be diversified away by investing in both Eagle Financial 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 Eagle Financial and Enterprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Financial Services and Enterprise Financial Services, you can compare the effects of market volatilities on Eagle Financial 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 Eagle Financial with a short position of Enterprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Financial and Enterprise Financial.
Diversification Opportunities for Eagle Financial and Enterprise Financial
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eagle and Enterprise is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Financial Services and Enterprise Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Financial and Eagle 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 Eagle Financial Services 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 Eagle Financial i.e., Eagle Financial and Enterprise Financial go up and down completely randomly.
Pair Corralation between Eagle Financial and Enterprise Financial
Given the investment horizon of 90 days Eagle Financial Services is expected to under-perform the Enterprise Financial. But the otc stock apears to be less risky and, when comparing its historical volatility, Eagle Financial Services is 2.42 times less risky than Enterprise Financial. The otc stock trades about -0.38 of its potential returns per unit of risk. The Enterprise Financial Services is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 3,922 in Enterprise Financial Services on January 20, 2024 and sell it today you would lose (104.00) from holding Enterprise Financial Services or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eagle Financial Services vs. Enterprise Financial Services
Performance |
| Timeline |
| Eagle Financial Services |
| Enterprise Financial |
Eagle Financial and Enterprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Financial and Enterprise Financial
The main advantage of trading using opposite Eagle Financial and Enterprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Financial 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.| Eagle Financial vs. Pfizer Inc | Eagle Financial vs. Heartland Financial USA | Eagle Financial vs. Conflux Network | Eagle Financial vs. Citigroup Capital XIII |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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