Correlation Between Aozora Bank and Bridgewater Bancshares
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and Bridgewater Bancshares 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 Aozora Bank and Bridgewater Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank Ltd and Bridgewater Bancshares Depositary, you can compare the effects of market volatilities on Aozora Bank and Bridgewater Bancshares 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 Aozora Bank with a short position of Bridgewater Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Bridgewater Bancshares.
Diversification Opportunities for Aozora Bank and Bridgewater Bancshares
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aozora and Bridgewater is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank Ltd and Bridgewater Bancshares Deposit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgewater Bancshares and Aozora Bank 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 Aozora Bank Ltd are associated (or correlated) with Bridgewater Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgewater Bancshares has no effect on the direction of Aozora Bank i.e., Aozora Bank and Bridgewater Bancshares go up and down completely randomly.
Pair Corralation between Aozora Bank and Bridgewater Bancshares
Assuming the 90 days horizon Aozora Bank Ltd is expected to under-perform the Bridgewater Bancshares. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aozora Bank Ltd is 1.23 times less risky than Bridgewater Bancshares. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Bridgewater Bancshares Depositary is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,950 in Bridgewater Bancshares Depositary on November 18, 2024 and sell it today you would lose (5.00) from holding Bridgewater Bancshares Depositary or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aozora Bank Ltd vs. Bridgewater Bancshares Deposit
Performance |
| Timeline |
| Aozora Bank |
| Bridgewater Bancshares |
Aozora Bank and Bridgewater Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and Bridgewater Bancshares
The main advantage of trading using opposite Aozora Bank and Bridgewater Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, Bridgewater Bancshares 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 Bridgewater Bancshares will offset losses from the drop in Bridgewater Bancshares' long position.| Aozora Bank vs. Banco Bradesco SA | Aozora Bank vs. Itau Unibanco Banco | Aozora Bank vs. Lloyds Banking Group | Aozora Bank vs. Deutsche Bank AG |
| Bridgewater Bancshares vs. CNB Financial | Bridgewater Bancshares vs. First Guaranty Bancshares | Bridgewater Bancshares vs. Dime Community Bancshares | Bridgewater Bancshares vs. Brighthouse Financial |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |