Correlation Between Bridgewater Bancshares and Associated Banc
Can any of the company-specific risk be diversified away by investing in both Bridgewater Bancshares and Associated Banc 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 Associated Banc 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 Associated Banc Corp, you can compare the effects of market volatilities on Bridgewater Bancshares and Associated Banc 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 Associated Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgewater Bancshares and Associated Banc.
Diversification Opportunities for Bridgewater Bancshares and Associated Banc
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bridgewater and Associated is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bridgewater Bancshares Deposit and Associated Banc Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Banc Corp 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 Associated Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Banc Corp has no effect on the direction of Bridgewater Bancshares i.e., Bridgewater Bancshares and Associated Banc go up and down completely randomly.
Pair Corralation between Bridgewater Bancshares and Associated Banc
Assuming the 90 days horizon Bridgewater Bancshares Depositary is expected to under-perform the Associated Banc. But the preferred stock apears to be less risky and, when comparing its historical volatility, Bridgewater Bancshares Depositary is 1.32 times less risky than Associated Banc. The preferred stock trades about -0.06 of its potential returns per unit of risk. The Associated Banc Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,186 in Associated Banc Corp on November 9, 2024 and sell it today you would lose (7.00) from holding Associated Banc Corp or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgewater Bancshares Deposit vs. Associated Banc Corp
Performance |
| Timeline |
| Bridgewater Bancshares |
| Associated Banc Corp |
Bridgewater Bancshares and Associated Banc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgewater Bancshares and Associated Banc
The main advantage of trading using opposite Bridgewater Bancshares and Associated Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgewater Bancshares position performs unexpectedly, Associated Banc 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 Associated Banc will offset losses from the drop in Associated Banc's long position.| Bridgewater Bancshares vs. CNB Financial | Bridgewater Bancshares vs. First Guaranty Bancshares | Bridgewater Bancshares vs. Dime Community Bancshares | Bridgewater Bancshares vs. Brighthouse Financial |
| Associated Banc vs. Andover Bancorp | Associated Banc vs. Aozora Bank Ltd | Associated Banc vs. Absa Group Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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