Correlation Between Bridgewater Bancshares and Heritage NOLA
Can any of the company-specific risk be diversified away by investing in both Bridgewater Bancshares and Heritage NOLA 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 Heritage NOLA 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 Heritage NOLA Bancorp, you can compare the effects of market volatilities on Bridgewater Bancshares and Heritage NOLA 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 Heritage NOLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgewater Bancshares and Heritage NOLA.
Diversification Opportunities for Bridgewater Bancshares and Heritage NOLA
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bridgewater and Heritage is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bridgewater Bancshares Deposit and Heritage NOLA Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage NOLA Bancorp 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 Heritage NOLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage NOLA Bancorp has no effect on the direction of Bridgewater Bancshares i.e., Bridgewater Bancshares and Heritage NOLA go up and down completely randomly.
Pair Corralation between Bridgewater Bancshares and Heritage NOLA
Assuming the 90 days horizon Bridgewater Bancshares Depositary is expected to under-perform the Heritage NOLA. In addition to that, Bridgewater Bancshares is 1.53 times more volatile than Heritage NOLA Bancorp. It trades about -0.04 of its total potential returns per unit of risk. Heritage NOLA Bancorp is currently generating about 0.27 per unit of volatility. If you would invest 1,300 in Heritage NOLA Bancorp on August 30, 2024 and sell it today you would earn a total of 97.00 from holding Heritage NOLA Bancorp or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bridgewater Bancshares Deposit vs. Heritage NOLA Bancorp
Performance |
| Timeline |
| Bridgewater Bancshares |
| Heritage NOLA Bancorp |
Bridgewater Bancshares and Heritage NOLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgewater Bancshares and Heritage NOLA
The main advantage of trading using opposite Bridgewater Bancshares and Heritage NOLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgewater Bancshares position performs unexpectedly, Heritage NOLA 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 Heritage NOLA will offset losses from the drop in Heritage NOLA'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 |
| Heritage NOLA vs. Rhinebeck Bancorp | Heritage NOLA vs. Bridgewater Bancshares Depositary | Heritage NOLA vs. Home Federal Bancorp | Heritage NOLA vs. LINKBANCORP |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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