Correlation Between Associated Banc and Bridgewater Bancshares
Can any of the company-specific risk be diversified away by investing in both Associated Banc 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 Associated Banc and Bridgewater Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Banc Corp and Bridgewater Bancshares Depositary, you can compare the effects of market volatilities on Associated Banc 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 Associated Banc with a short position of Bridgewater Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and Bridgewater Bancshares.
Diversification Opportunities for Associated Banc and Bridgewater Bancshares
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Associated and Bridgewater is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and Bridgewater Bancshares Deposit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgewater Bancshares and Associated Banc 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 Associated Banc Corp 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 Associated Banc i.e., Associated Banc and Bridgewater Bancshares go up and down completely randomly.
Pair Corralation between Associated Banc and Bridgewater Bancshares
Assuming the 90 days trading horizon Associated Banc Corp is expected to generate 0.79 times more return on investment than Bridgewater Bancshares. However, Associated Banc Corp is 1.27 times less risky than Bridgewater Bancshares. It trades about 0.02 of its potential returns per unit of risk. Bridgewater Bancshares Depositary is currently generating about 0.02 per unit of risk. If you would invest 1,898 in Associated Banc Corp on August 27, 2024 and sell it today you would earn a total of 224.00 from holding Associated Banc Corp or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Banc Corp vs. Bridgewater Bancshares Deposit
Performance |
| Timeline |
| Associated Banc Corp |
| Bridgewater Bancshares |
Associated Banc and Bridgewater Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Banc and Bridgewater Bancshares
The main advantage of trading using opposite Associated Banc and Bridgewater Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Banc 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.| Associated Banc vs. Morgan Stanley | Associated Banc vs. KeyCorp | Associated Banc vs. KeyCorp | Associated Banc vs. KeyCorp |
| Bridgewater Bancshares vs. Capital One Financial | Bridgewater Bancshares vs. Capital One Financial | Bridgewater Bancshares vs. Bank of America |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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