Correlation Between Civista Bancshares and Enterprise Financial

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

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

Diversification Opportunities for Civista Bancshares and Enterprise Financial

0.05

Correlation Coefficient

Civista Bancshares  Enterprise Financial

Significant diversification

The 3 months correlation between Civista and Enterprise is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Civista Bancshares and Enterprise Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Financial and Civista Bancshares 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 Civista Bancshares 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 Civista Bancshares i.e., Civista Bancshares and Enterprise Financial go up and down completely randomly.

Pair Corralation between Civista Bancshares and Enterprise Financial

Given the investment horizon of 90 days Civista Bancshares is expected to under-perform the Enterprise Financial. In addition to that, Civista Bancshares is 1.81 times more volatile than Enterprise Financial Services. It trades about -0.09 of its total potential returns per unit of risk. Enterprise Financial Services is currently generating about 0.03 per unit of volatility. If you would invest  5,267  in Enterprise Financial Services on May 5, 2025 and sell it today you would earn a total of  114.00  from holding Enterprise Financial Services or generate 2.16% return on investment over 90 days.

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

Civista Bancshares  vs.  Enterprise Financial Services

Civista Bancshares

Risk-Adjusted Performance

Very Weak

Over the last 90 days Civista Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Enterprise Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enterprise Financial Services are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Enterprise Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Civista Bancshares and Enterprise Financial

The main advantage of trading using opposite Civista Bancshares and Enterprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Civista Bancshares 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 Civista Bancshares 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.