Correlation Between Bridgewater Bancshares and CNB Financial
Can any of the company-specific risk be diversified away by investing in both Bridgewater Bancshares and CNB 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 Bridgewater Bancshares and CNB Financial 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 CNB Financial, you can compare the effects of market volatilities on Bridgewater Bancshares and CNB 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 Bridgewater Bancshares with a short position of CNB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgewater Bancshares and CNB Financial.
Diversification Opportunities for Bridgewater Bancshares and CNB Financial
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bridgewater and CNB is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bridgewater Bancshares Deposit and CNB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Financial 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 CNB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Financial has no effect on the direction of Bridgewater Bancshares i.e., Bridgewater Bancshares and CNB Financial go up and down completely randomly.
Pair Corralation between Bridgewater Bancshares and CNB Financial
Assuming the 90 days horizon Bridgewater Bancshares is expected to generate 6.29 times less return on investment than CNB Financial. In addition to that, Bridgewater Bancshares is 1.34 times more volatile than CNB Financial. It trades about 0.01 of its total potential returns per unit of risk. CNB Financial is currently generating about 0.1 per unit of volatility. If you would invest 2,294 in CNB Financial on August 25, 2024 and sell it today you would earn a total of 209.00 from holding CNB Financial or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Bridgewater Bancshares Deposit vs. CNB Financial
Performance |
| Timeline |
| Bridgewater Bancshares |
| CNB Financial |
Bridgewater Bancshares and CNB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgewater Bancshares and CNB Financial
The main advantage of trading using opposite Bridgewater Bancshares and CNB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgewater Bancshares position performs unexpectedly, CNB 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 CNB Financial will offset losses from the drop in CNB Financial'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 |
| CNB Financial vs. Capital One Financial | CNB Financial vs. Capital One Financial | CNB Financial vs. Bank of America | CNB Financial vs. KeyCorp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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