Correlation Between Bankwell Financial and China Power
Can any of the company-specific risk be diversified away by investing in both Bankwell Financial and China Power 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 China Power 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 China Power Equipment, you can compare the effects of market volatilities on Bankwell Financial and China Power 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 China Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankwell Financial and China Power.
Diversification Opportunities for Bankwell Financial and China Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bankwell and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bankwell Financial Group and China Power Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Power Equipment 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 China Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Power Equipment has no effect on the direction of Bankwell Financial i.e., Bankwell Financial and China Power go up and down completely randomly.
Pair Corralation between Bankwell Financial and China Power
If you would invest 3,018 in Bankwell Financial Group on November 4, 2024 and sell it today you would earn a total of 100.00 from holding Bankwell Financial Group or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bankwell Financial Group vs. China Power Equipment
Performance |
| Timeline |
| Bankwell Financial |
| China Power Equipment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bankwell Financial and China Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankwell Financial and China Power
The main advantage of trading using opposite Bankwell Financial and China Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankwell Financial position performs unexpectedly, China Power 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 China Power will offset losses from the drop in China Power's long position.| Bankwell Financial vs. US Bancorp | Bankwell Financial vs. Truist Financial Corp | Bankwell Financial vs. Fifth Third Bancorp | Bankwell Financial vs. KeyCorp |
| China Power vs. Wheels Up Experience | China Power vs. Mesa Air Group | China Power vs. Garmin | China Power vs. EvoAir Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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