Correlation Between Bridgewater Bancshares and Tectonic Financial
Can any of the company-specific risk be diversified away by investing in both Bridgewater Bancshares and Tectonic 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 Tectonic 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 Tectonic Financial PR, you can compare the effects of market volatilities on Bridgewater Bancshares and Tectonic 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 Tectonic Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgewater Bancshares and Tectonic Financial.
Diversification Opportunities for Bridgewater Bancshares and Tectonic Financial
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bridgewater and Tectonic is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bridgewater Bancshares Deposit and Tectonic Financial PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tectonic 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 Tectonic Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tectonic Financial has no effect on the direction of Bridgewater Bancshares i.e., Bridgewater Bancshares and Tectonic Financial go up and down completely randomly.
Pair Corralation between Bridgewater Bancshares and Tectonic Financial
Assuming the 90 days horizon Bridgewater Bancshares is expected to generate 1.34 times less return on investment than Tectonic Financial. In addition to that, Bridgewater Bancshares is 3.65 times more volatile than Tectonic Financial PR. It trades about 0.04 of its total potential returns per unit of risk. Tectonic Financial PR is currently generating about 0.2 per unit of volatility. If you would invest 1,030 in Tectonic Financial PR on October 26, 2024 and sell it today you would earn a total of 29.00 from holding Tectonic Financial PR or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgewater Bancshares Deposit vs. Tectonic Financial PR
Performance |
| Timeline |
| Bridgewater Bancshares |
| Tectonic Financial |
Bridgewater Bancshares and Tectonic Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgewater Bancshares and Tectonic Financial
The main advantage of trading using opposite Bridgewater Bancshares and Tectonic Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgewater Bancshares position performs unexpectedly, Tectonic 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 Tectonic Financial will offset losses from the drop in Tectonic 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 |
| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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