Correlation Between IPath Series and ENB Financial

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

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

Diversification Opportunities for IPath Series and ENB Financial

-0.22

Correlation Coefficient

IPath Series  ENB Financial

Very good diversification

The 3 months correlation between IPath and ENB is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B 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 IPath Series 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 iPath Series B 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 IPath Series i.e., IPath Series and ENB Financial go up and down completely randomly.

Pair Corralation between IPath Series and ENB Financial

Considering the 90-day investment horizon iPath Series B is expected to under-perform the ENB Financial. But the etf apears to be less risky and, when comparing its historical volatility, iPath Series B is 1.24 times less risky than ENB Financial. The etf trades about -0.02 of its potential returns per unit of risk. The ENB Financial Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,655  in ENB Financial Corp on May 5, 2025 and sell it today you would earn a total of  245.00  from holding ENB Financial Corp or generate 14.8% return on investment over 90 days.

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

iPath Series B  vs.  ENB Financial Corp

iPath Series B

Risk-Adjusted Performance

Very Weak

Over the last 90 days iPath Series B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, IPath Series is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

ENB Financial Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ENB Financial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental drivers, ENB Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IPath Series and ENB Financial

The main advantage of trading using opposite IPath Series and ENB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Series 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 iPath Series B 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.