Correlation Between Enterprise Financial and Pioneer Bancorp

Can any of the company-specific risk be diversified away by investing in both Enterprise Financial and Pioneer Bancorp 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 Pioneer Bancorp 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 Pioneer Bancorp, you can compare the effects of market volatilities on Enterprise Financial and Pioneer Bancorp 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 Pioneer Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and Pioneer Bancorp.

Diversification Opportunities for Enterprise Financial and Pioneer Bancorp

-0.28

Correlation Coefficient

Enterprise Financial  Pioneer Bancorp

Very good diversification

The 3 months correlation between Enterprise and Pioneer is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services and Pioneer Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bancorp 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 Pioneer Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Bancorp has no effect on the direction of Enterprise Financial i.e., Enterprise Financial and Pioneer Bancorp go up and down completely randomly.

Pair Corralation between Enterprise Financial and Pioneer Bancorp

Assuming the 90 days horizon Enterprise Financial is expected to generate 1.08 times less return on investment than Pioneer Bancorp. But when comparing it to its historical volatility, Enterprise Financial Services is 1.22 times less risky than Pioneer Bancorp. It trades about 0.05 of its potential returns per unit of risk. Pioneer Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  972.00  in Pioneer Bancorp on October 7, 2024 and sell it today you would earn a total of  169.00  from holding Pioneer Bancorp or generate 17.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Enterprise Financial Services  vs.  Pioneer Bancorp

Enterprise Financial

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Preferred Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pioneer Bancorp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Pioneer Bancorp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Enterprise Financial and Pioneer Bancorp

The main advantage of trading using opposite Enterprise Financial and Pioneer Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial position performs unexpectedly, Pioneer Bancorp 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 Pioneer Bancorp will offset losses from the drop in Pioneer Bancorp's long position.

The idea behind Enterprise Financial Services and Pioneer Bancorp 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.