Correlation Between Bankwell Financial and Inter Co
Can any of the company-specific risk be diversified away by investing in both Bankwell Financial and Inter Co 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 Inter Co 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 Inter Co Class, you can compare the effects of market volatilities on Bankwell Financial and Inter Co 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 Inter Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankwell Financial and Inter Co.
Diversification Opportunities for Bankwell Financial and Inter Co
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bankwell and Inter is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bankwell Financial Group and Inter Co Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Co Class 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 Inter Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Co Class has no effect on the direction of Bankwell Financial i.e., Bankwell Financial and Inter Co go up and down completely randomly.
Pair Corralation between Bankwell Financial and Inter Co
Given the investment horizon of 90 days Bankwell Financial Group is expected to generate 0.39 times more return on investment than Inter Co. However, Bankwell Financial Group is 2.54 times less risky than Inter Co. It trades about 0.01 of its potential returns per unit of risk. Inter Co Class is currently generating about -0.33 per unit of risk. If you would invest 3,260 in Bankwell Financial Group on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Bankwell Financial Group or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankwell Financial Group vs. Inter Co Class
Performance |
| Timeline |
| Bankwell Financial |
| Inter Co Class |
Bankwell Financial and Inter Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankwell Financial and Inter Co
The main advantage of trading using opposite Bankwell Financial and Inter Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankwell Financial position performs unexpectedly, Inter Co 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 Inter Co will offset losses from the drop in Inter Co'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 |
| Inter Co vs. Community West Bancshares | Inter Co vs. First Financial Northwest | Inter Co vs. First Northwest Bancorp | Inter Co vs. First Capital |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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