Correlation Between Cincinnati Bancorp and Enterprise Financial

Can any of the company-specific risk be diversified away by investing in both Cincinnati Bancorp 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 Cincinnati Bancorp and Enterprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cincinnati Bancorp and Enterprise Financial Services, you can compare the effects of market volatilities on Cincinnati Bancorp 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 Cincinnati Bancorp with a short position of Enterprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Bancorp and Enterprise Financial.

Diversification Opportunities for Cincinnati Bancorp and Enterprise Financial

0.0

Correlation Coefficient

Cincinnati Bancorp  Enterprise Financial

Pay attention - limited upside

The 3 months correlation between Cincinnati and Enterprise is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Bancorp and Enterprise Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Financial and Cincinnati 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 Cincinnati Bancorp 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 Cincinnati Bancorp i.e., Cincinnati Bancorp and Enterprise Financial go up and down completely randomly.

Pair Corralation between Cincinnati Bancorp and Enterprise Financial

If you would invest (100.00) in Cincinnati Bancorp on November 29, 2024 and sell it today you would earn a total of  100.00  from holding Cincinnati Bancorp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cincinnati Bancorp  vs.  Enterprise Financial Services

Cincinnati Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cincinnati Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cincinnati Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Enterprise Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enterprise Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Enterprise Financial is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cincinnati Bancorp and Enterprise Financial

The main advantage of trading using opposite Cincinnati Bancorp and Enterprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Bancorp 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 Cincinnati Bancorp 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.