Correlation Between CNB Financial and Bridgewater Bancshares
Can any of the company-specific risk be diversified away by investing in both CNB Financial and Bridgewater Bancshares 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 CNB Financial and Bridgewater Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNB Financial and Bridgewater Bancshares Depositary, you can compare the effects of market volatilities on CNB Financial and Bridgewater Bancshares 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 CNB Financial with a short position of Bridgewater Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNB Financial and Bridgewater Bancshares.
Diversification Opportunities for CNB Financial and Bridgewater Bancshares
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between CNB and Bridgewater is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CNB Financial and Bridgewater Bancshares Deposit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgewater Bancshares and CNB 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 CNB Financial are associated (or correlated) with Bridgewater Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgewater Bancshares has no effect on the direction of CNB Financial i.e., CNB Financial and Bridgewater Bancshares go up and down completely randomly.
Pair Corralation between CNB Financial and Bridgewater Bancshares
Assuming the 90 days horizon CNB Financial is expected to generate 0.88 times more return on investment than Bridgewater Bancshares. However, CNB Financial is 1.14 times less risky than Bridgewater Bancshares. It trades about 0.02 of its potential returns per unit of risk. Bridgewater Bancshares Depositary is currently generating about 0.02 per unit of risk. If you would invest 2,242 in CNB Financial on November 2, 2024 and sell it today you would earn a total of 269.00 from holding CNB Financial or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNB Financial vs. Bridgewater Bancshares Deposit
Performance |
| Timeline |
| CNB Financial |
| Bridgewater Bancshares |
CNB Financial and Bridgewater Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNB Financial and Bridgewater Bancshares
The main advantage of trading using opposite CNB Financial and Bridgewater Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNB Financial position performs unexpectedly, Bridgewater Bancshares 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 Bridgewater Bancshares will offset losses from the drop in Bridgewater Bancshares' long position.| CNB Financial vs. Heartland Financial USA | CNB Financial vs. Dime Community Bancshares | CNB Financial vs. Pinnacle Financial Partners | CNB Financial vs. Fulton Financial |
| Bridgewater Bancshares vs. CNB Financial | Bridgewater Bancshares vs. First Guaranty Bancshares | Bridgewater Bancshares vs. Dime Community Bancshares | Bridgewater Bancshares vs. Brighthouse Financial |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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