Correlation Between Bridgewater Bancshares and NBT Bancorp
Can any of the company-specific risk be diversified away by investing in both Bridgewater Bancshares and NBT Bancorp 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 NBT Bancorp 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 NBT Bancorp, you can compare the effects of market volatilities on Bridgewater Bancshares and NBT Bancorp 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 NBT Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgewater Bancshares and NBT Bancorp.
Diversification Opportunities for Bridgewater Bancshares and NBT Bancorp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bridgewater and NBT is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bridgewater Bancshares Deposit and NBT Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBT 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 NBT Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBT Bancorp has no effect on the direction of Bridgewater Bancshares i.e., Bridgewater Bancshares and NBT Bancorp go up and down completely randomly.
Pair Corralation between Bridgewater Bancshares and NBT Bancorp
Assuming the 90 days horizon Bridgewater Bancshares Depositary is expected to generate 0.48 times more return on investment than NBT Bancorp. However, Bridgewater Bancshares Depositary is 2.09 times less risky than NBT Bancorp. It trades about 0.11 of its potential returns per unit of risk. NBT Bancorp is currently generating about -0.06 per unit of risk. If you would invest 1,899 in Bridgewater Bancshares Depositary on November 28, 2024 and sell it today you would earn a total of 38.00 from holding Bridgewater Bancshares Depositary or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgewater Bancshares Deposit vs. NBT Bancorp
Performance |
| Timeline |
| Bridgewater Bancshares |
| NBT Bancorp |
Bridgewater Bancshares and NBT Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgewater Bancshares and NBT Bancorp
The main advantage of trading using opposite Bridgewater Bancshares and NBT Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgewater Bancshares position performs unexpectedly, NBT Bancorp 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 NBT Bancorp will offset losses from the drop in NBT Bancorp'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 |
| NBT Bancorp vs. Oak Valley Bancorp | NBT Bancorp vs. Home Federal Bancorp | NBT Bancorp vs. Finward Bancorp | NBT Bancorp vs. Community West Bancshares |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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