Correlation Between Meridian Bancorp and Enterprise Bancorp
Can any of the company-specific risk be diversified away by investing in both Meridian Bancorp and Enterprise 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 Meridian Bancorp and Enterprise Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridian Bancorp and Enterprise Bancorp, you can compare the effects of market volatilities on Meridian Bancorp and Enterprise 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 Meridian Bancorp with a short position of Enterprise Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Bancorp and Enterprise Bancorp.
Diversification Opportunities for Meridian Bancorp and Enterprise Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Meridian and Enterprise is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Bancorp and Enterprise Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Bancorp and Meridian 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 Meridian Bancorp are associated (or correlated) with Enterprise Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enterprise Bancorp has no effect on the direction of Meridian Bancorp i.e., Meridian Bancorp and Enterprise Bancorp go up and down completely randomly.
Pair Corralation between Meridian Bancorp and Enterprise Bancorp
If you would invest (100.00) in Meridian Bancorp on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Meridian 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 |
Meridian Bancorp vs. Enterprise Bancorp
Performance |
| Timeline |
| Meridian Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Enterprise Bancorp |
Meridian Bancorp and Enterprise Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Bancorp and Enterprise Bancorp
The main advantage of trading using opposite Meridian Bancorp and Enterprise Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Bancorp position performs unexpectedly, Enterprise 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 Enterprise Bancorp will offset losses from the drop in Enterprise Bancorp's long position.| Meridian Bancorp vs. National CineMedia | Meridian Bancorp vs. TFI International | Meridian Bancorp vs. Verra Mobility Corp | Meridian Bancorp vs. Ryanair Holdings PLC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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