Correlation Between Equity Bancshares, and Enterprise Bancorp

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

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

Diversification Opportunities for Equity Bancshares, and Enterprise Bancorp

0.0

Correlation Coefficient

Equity Bancshares,  Enterprise Bancorp

Pay attention - limited upside

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

Pair Corralation between Equity Bancshares, and Enterprise Bancorp

Given the investment horizon of 90 days Equity Bancshares, is expected to under-perform the Enterprise Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Equity Bancshares, is 1.01 times less risky than Enterprise Bancorp. The stock trades about -0.06 of its potential returns per unit of risk. The Enterprise Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,874  in Enterprise Bancorp on May 5, 2025 and sell it today you would earn a total of  90.00  from holding Enterprise Bancorp or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	65.08%
Values	Daily Returns

Equity Bancshares,  vs.  Enterprise Bancorp

Equity Bancshares,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equity Bancshares, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Equity Bancshares, is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Enterprise Bancorp

Risk-Adjusted Performance

Insignificant

Over the last 90 days Enterprise Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Enterprise Bancorp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Equity Bancshares, and Enterprise Bancorp

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

The idea behind Equity Bancshares, and Enterprise 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.