Correlation Between BankUnited and Dime Community
Can any of the company-specific risk be diversified away by investing in both BankUnited and Dime Community 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 BankUnited and Dime Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BankUnited and Dime Community Bancshares, you can compare the effects of market volatilities on BankUnited and Dime Community 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 BankUnited with a short position of Dime Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankUnited and Dime Community.
Diversification Opportunities for BankUnited and Dime Community
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BankUnited and Dime is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BankUnited and Dime Community Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dime Community Bancshares and BankUnited 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 BankUnited are associated (or correlated) with Dime Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dime Community Bancshares has no effect on the direction of BankUnited i.e., BankUnited and Dime Community go up and down completely randomly.
Pair Corralation between BankUnited and Dime Community
Considering the 90-day investment horizon BankUnited is expected to under-perform the Dime Community. But the stock apears to be less risky and, when comparing its historical volatility, BankUnited is 1.34 times less risky than Dime Community. The stock trades about -0.27 of its potential returns per unit of risk. The Dime Community Bancshares is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,078 in Dime Community Bancshares on November 29, 2024 and sell it today you would lose (12.00) from holding Dime Community Bancshares or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BankUnited vs. Dime Community Bancshares
Performance |
| Timeline |
| BankUnited |
| Dime Community Bancshares |
BankUnited and Dime Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BankUnited and Dime Community
The main advantage of trading using opposite BankUnited and Dime Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankUnited position performs unexpectedly, Dime Community 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 Dime Community will offset losses from the drop in Dime Community's long position.| BankUnited vs. International Bancshares | BankUnited vs. Hilltop Holdings | BankUnited vs. FB Financial Corp | BankUnited vs. Red River Bancshares |
| Dime Community vs. Peapack Gladstone Financial | Dime Community vs. Northfield Bancorp | Dime Community vs. Great Southern Bancorp | Dime Community vs. Heritage 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world |