Correlation Between Bankwell Financial and American National
Can any of the company-specific risk be diversified away by investing in both Bankwell Financial and American National 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 Bankwell Financial and American National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankwell Financial Group and American National Bankshares, you can compare the effects of market volatilities on Bankwell Financial and American National 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 Bankwell Financial with a short position of American National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankwell Financial and American National.
Diversification Opportunities for Bankwell Financial and American National
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bankwell and American is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bankwell Financial Group and American National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National and Bankwell Financial 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 Bankwell Financial Group are associated (or correlated) with American National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American National has no effect on the direction of Bankwell Financial i.e., Bankwell Financial and American National go up and down completely randomly.
Pair Corralation between Bankwell Financial and American National
If you would invest 2,884 in Bankwell Financial Group on August 27, 2024 and sell it today you would earn a total of 570.00 from holding Bankwell Financial Group or generate 19.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Bankwell Financial Group vs. American National Bankshares
Performance |
| Timeline |
| Bankwell Financial |
| American National |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bankwell Financial and American National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankwell Financial and American National
The main advantage of trading using opposite Bankwell Financial and American National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankwell Financial position performs unexpectedly, American National 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 American National will offset losses from the drop in American National's long position.| Bankwell Financial vs. Franklin Financial Services | Bankwell Financial vs. The First Bancshares, | Bankwell Financial vs. Home Federal Bancorp | Bankwell Financial vs. Lake Shore Bancorp |
| American National vs. First Northwest Bancorp | American National vs. Community West Bancshares | American National vs. First Financial Northwest | American National vs. Great Southern Bancorp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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