Correlation Between CVW CleanTech and BCB Bancorp
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech and BCB 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 CVW CleanTech and BCB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and BCB Bancorp, you can compare the effects of market volatilities on CVW CleanTech and BCB 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 CVW CleanTech with a short position of BCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and BCB Bancorp.
Diversification Opportunities for CVW CleanTech and BCB Bancorp
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVW and BCB is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp and CVW CleanTech 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 CVW CleanTech are associated (or correlated) with BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and BCB Bancorp go up and down completely randomly.
Pair Corralation between CVW CleanTech and BCB Bancorp
Assuming the 90 days horizon CVW CleanTech is expected to generate 2.65 times less return on investment than BCB Bancorp. But when comparing it to its historical volatility, CVW CleanTech is 2.53 times less risky than BCB Bancorp. It trades about 0.3 of its potential returns per unit of risk. BCB Bancorp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,191 in BCB Bancorp on August 28, 2024 and sell it today you would earn a total of 164.00 from holding BCB Bancorp or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. BCB Bancorp
Performance |
| Timeline |
| CVW CleanTech |
| BCB Bancorp |
CVW CleanTech and BCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and BCB Bancorp
The main advantage of trading using opposite CVW CleanTech and BCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech position performs unexpectedly, BCB 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 BCB Bancorp will offset losses from the drop in BCB Bancorp's long position.| CVW CleanTech vs. Legacy Education | CVW CleanTech vs. NVIDIA | CVW CleanTech vs. Apple Inc | CVW CleanTech vs. Microsoft |
| BCB Bancorp vs. Fifth Third Bancorp | BCB Bancorp vs. Zions Bancorporation | BCB Bancorp vs. Huntington Bancshares Incorporated | BCB Bancorp vs. Comerica |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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