Correlation Between Enterprise Financial and First Northwest
Can any of the company-specific risk be diversified away by investing in both Enterprise Financial and First Northwest 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 Enterprise Financial and First Northwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enterprise Financial Services and First Northwest Bancorp, you can compare the effects of market volatilities on Enterprise Financial and First Northwest 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 Enterprise Financial with a short position of First Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and First Northwest.
Diversification Opportunities for Enterprise Financial and First Northwest
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enterprise and First is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services and First Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Northwest Bancorp and Enterprise Financial 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 Enterprise Financial Services are associated (or correlated) with First Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Northwest Bancorp has no effect on the direction of Enterprise Financial i.e., Enterprise Financial and First Northwest go up and down completely randomly.
Pair Corralation between Enterprise Financial and First Northwest
Given the investment horizon of 90 days Enterprise Financial Services is expected to under-perform the First Northwest. But the stock apears to be less risky and, when comparing its historical volatility, Enterprise Financial Services is 1.3 times less risky than First Northwest. The stock trades about -0.09 of its potential returns per unit of risk. The First Northwest Bancorp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 744.00 in First Northwest Bancorp on August 29, 2025 and sell it today you would earn a total of 229.00 from holding First Northwest Bancorp or generate 30.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Financial Services vs. First Northwest Bancorp
Performance |
| Timeline |
| Enterprise Financial |
| First Northwest Bancorp |
Enterprise Financial and First Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Financial and First Northwest
The main advantage of trading using opposite Enterprise Financial and First Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial position performs unexpectedly, First Northwest 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 First Northwest will offset losses from the drop in First Northwest's long position.| Enterprise Financial vs. Osisko Metals Incorporated | Enterprise Financial vs. Upper Street Marketing | Enterprise Financial vs. CyberArk Software | Enterprise Financial vs. PARKSON Retail Group |
| First Northwest vs. G III Apparel Group | First Northwest vs. Xtera Communications | First Northwest vs. B Communications | First Northwest vs. Singapore Telecommunications Limited |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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