Correlation Between Susquehanna Community and ENB Financial

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

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

Diversification Opportunities for Susquehanna Community and ENB Financial

0.79

Correlation Coefficient

Susquehanna Community  ENB Financial

Poor diversification

The 3 months correlation between Susquehanna and ENB is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Susquehanna Community Financia and ENB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENB Financial Corp and Susquehanna Community 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 Susquehanna Community Financial are associated (or correlated) with ENB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENB Financial Corp has no effect on the direction of Susquehanna Community i.e., Susquehanna Community and ENB Financial go up and down completely randomly.

Pair Corralation between Susquehanna Community and ENB Financial

Given the investment horizon of 90 days Susquehanna Community Financial is expected to under-perform the ENB Financial. But the pink sheet apears to be less risky and, when comparing its historical volatility, Susquehanna Community Financial is 1.93 times less risky than ENB Financial. The pink sheet trades about -0.2 of its potential returns per unit of risk. The ENB Financial Corp is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,702  in ENB Financial Corp on December 29, 2024 and sell it today you would lose (114.00) from holding ENB Financial Corp or give up 6.7% of portfolio value over 90 days.

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

Susquehanna Community Financia  vs.  ENB Financial Corp

Susquehanna Community

Risk-Adjusted Performance

Very Weak

Over the last 90 days Susquehanna Community Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ENB Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ENB Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Susquehanna Community and ENB Financial

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

The idea behind Susquehanna Community Financial and ENB Financial Corp 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 Stocks Directory module to find actively traded stocks across global markets.