Correlation Between Bridgewater Bancshares and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both Bridgewater Bancshares and Aozora Bank 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 Bridgewater Bancshares and Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgewater Bancshares Depositary and Aozora Bank, you can compare the effects of market volatilities on Bridgewater Bancshares and Aozora Bank 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 Bridgewater Bancshares with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgewater Bancshares and Aozora Bank.
Diversification Opportunities for Bridgewater Bancshares and Aozora Bank
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bridgewater and Aozora is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bridgewater Bancshares Deposit and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank and Bridgewater Bancshares 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 Bridgewater Bancshares Depositary are associated (or correlated) with Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of Bridgewater Bancshares i.e., Bridgewater Bancshares and Aozora Bank go up and down completely randomly.
Pair Corralation between Bridgewater Bancshares and Aozora Bank
If you would invest 1,989 in Aozora Bank on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Aozora Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bridgewater Bancshares Deposit vs. Aozora Bank
Performance |
| Timeline |
| Bridgewater Bancshares |
| Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bridgewater Bancshares and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgewater Bancshares and Aozora Bank
The main advantage of trading using opposite Bridgewater Bancshares and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgewater Bancshares position performs unexpectedly, Aozora Bank 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.| Bridgewater Bancshares vs. Capital One Financial | Bridgewater Bancshares vs. Capital One Financial | Bridgewater Bancshares vs. Bank of America | Bridgewater Bancshares vs. KeyCorp |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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