Correlation Between Bankwell Financial and Lakeland Bancorp
Can any of the company-specific risk be diversified away by investing in both Bankwell Financial and Lakeland 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 Bankwell Financial and Lakeland Bancorp 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 Lakeland Bancorp, you can compare the effects of market volatilities on Bankwell Financial and Lakeland 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 Bankwell Financial with a short position of Lakeland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankwell Financial and Lakeland Bancorp.
Diversification Opportunities for Bankwell Financial and Lakeland Bancorp
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bankwell and Lakeland is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bankwell Financial Group and Lakeland Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Bancorp 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 Lakeland Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Bancorp has no effect on the direction of Bankwell Financial i.e., Bankwell Financial and Lakeland Bancorp go up and down completely randomly.
Pair Corralation between Bankwell Financial and Lakeland Bancorp
If you would invest 2,884 in Bankwell Financial Group on August 29, 2024 and sell it today you would earn a total of 530.00 from holding Bankwell Financial Group or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bankwell Financial Group vs. Lakeland Bancorp
Performance |
| Timeline |
| Bankwell Financial |
| Lakeland Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bankwell Financial and Lakeland Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankwell Financial and Lakeland Bancorp
The main advantage of trading using opposite Bankwell Financial and Lakeland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankwell Financial position performs unexpectedly, Lakeland 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 Lakeland Bancorp will offset losses from the drop in Lakeland Bancorp's long position.| Bankwell Financial vs. Fifth Third Bancorp | Bankwell Financial vs. Huntington Bancshares Incorporated | Bankwell Financial vs. MT Bank |
| Lakeland Bancorp vs. Peoples Bancorp | Lakeland Bancorp vs. Primis Financial Corp | Lakeland Bancorp vs. ConnectOne Bancorp | Lakeland Bancorp vs. LINKBANCORP |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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