Correlation Between BOK Financial and Bankwell Financial
Can any of the company-specific risk be diversified away by investing in both BOK Financial and Bankwell 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 BOK Financial and Bankwell Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOK Financial and Bankwell Financial Group, you can compare the effects of market volatilities on BOK Financial and Bankwell 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 BOK Financial with a short position of Bankwell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOK Financial and Bankwell Financial.
Diversification Opportunities for BOK Financial and Bankwell Financial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BOK and Bankwell is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding BOK Financial and Bankwell Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankwell Financial and BOK 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 BOK Financial are associated (or correlated) with Bankwell Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankwell Financial has no effect on the direction of BOK Financial i.e., BOK Financial and Bankwell Financial go up and down completely randomly.
Pair Corralation between BOK Financial and Bankwell Financial
Given the investment horizon of 90 days BOK Financial is expected to under-perform the Bankwell Financial. But the stock apears to be less risky and, when comparing its historical volatility, BOK Financial is 1.24 times less risky than Bankwell Financial. The stock trades about -0.05 of its potential returns per unit of risk. The Bankwell Financial Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,986 in Bankwell Financial Group on November 18, 2024 and sell it today you would earn a total of 146.00 from holding Bankwell Financial Group or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOK Financial vs. Bankwell Financial Group
Performance |
| Timeline |
| BOK Financial |
| Bankwell Financial |
BOK Financial and Bankwell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOK Financial and Bankwell Financial
The main advantage of trading using opposite BOK Financial and Bankwell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOK Financial position performs unexpectedly, Bankwell 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 Bankwell Financial will offset losses from the drop in Bankwell Financial's long position.| BOK Financial vs. First Financial Bankshares | BOK Financial vs. Auburn National Bancorporation | BOK Financial vs. Great Southern Bancorp | BOK Financial vs. First Guaranty Bancshares |
| Bankwell Financial vs. Franklin Financial Services | Bankwell Financial vs. The First Bancshares, | Bankwell Financial vs. Home Federal Bancorp | Bankwell Financial vs. Lake Shore Bancorp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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