Correlation Between Brookline Bancorp and ENB Financial
Can any of the company-specific risk be diversified away by investing in both Brookline Bancorp 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 Brookline Bancorp and ENB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookline Bancorp and ENB Financial Corp, you can compare the effects of market volatilities on Brookline Bancorp 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 Brookline Bancorp with a short position of ENB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookline Bancorp and ENB Financial.
Diversification Opportunities for Brookline Bancorp and ENB Financial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brookline and ENB is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Brookline Bancorp 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 Brookline 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 Brookline Bancorp 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 Brookline Bancorp i.e., Brookline Bancorp and ENB Financial go up and down completely randomly.
Pair Corralation between Brookline Bancorp and ENB Financial
Given the investment horizon of 90 days Brookline Bancorp is expected to under-perform the ENB Financial. But the stock apears to be less risky and, when comparing its historical volatility, Brookline Bancorp is 1.29 times less risky than ENB Financial. The stock trades about -0.02 of its potential returns per unit of risk. The ENB Financial Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,968 in ENB Financial Corp on January 20, 2024 and sell it today you would lose (508.00) from holding ENB Financial Corp or give up 25.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.9% |
| Values | Daily Returns |
Brookline Bancorp vs. ENB Financial Corp
Performance |
| Timeline |
| Brookline Bancorp |
| ENB Financial Corp |
Brookline Bancorp and ENB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookline Bancorp and ENB Financial
The main advantage of trading using opposite Brookline Bancorp and ENB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookline Bancorp 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 Brookline Bancorp 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.| ENB Financial vs. Pfizer Inc | ENB Financial vs. Heartland Financial USA | ENB Financial vs. Conflux Network | ENB Financial vs. Citigroup Capital XIII |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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