Correlation Between Equity Bancshares, and Bridgewater Bancshares
Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, 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 Equity Bancshares, and Bridgewater Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Bancshares, and Bridgewater Bancshares, you can compare the effects of market volatilities on Equity Bancshares, 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 Equity Bancshares, with a short position of Bridgewater Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and Bridgewater Bancshares.
Diversification Opportunities for Equity Bancshares, and Bridgewater Bancshares
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Equity and Bridgewater is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Bridgewater Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgewater Bancshares and Equity Bancshares, 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 Equity Bancshares, 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 Equity Bancshares, i.e., Equity Bancshares, and Bridgewater Bancshares go up and down completely randomly.
Pair Corralation between Equity Bancshares, and Bridgewater Bancshares
Given the investment horizon of 90 days Equity Bancshares, is expected to generate 0.88 times more return on investment than Bridgewater Bancshares. However, Equity Bancshares, is 1.14 times less risky than Bridgewater Bancshares. It trades about 0.04 of its potential returns per unit of risk. Bridgewater Bancshares is currently generating about 0.0 per unit of risk. If you would invest 3,352 in Equity Bancshares, on September 4, 2024 and sell it today you would earn a total of 1,424 from holding Equity Bancshares, or generate 42.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Bancshares, vs. Bridgewater Bancshares
Performance |
| Timeline |
| Equity Bancshares, |
| Bridgewater Bancshares |
Equity Bancshares, and Bridgewater Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Bancshares, and Bridgewater Bancshares
The main advantage of trading using opposite Equity Bancshares, and Bridgewater Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, 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.| Equity Bancshares, vs. Brookline Bancorp | Equity Bancshares, vs. Kearny Financial Corp | Equity Bancshares, vs. Heritage Financial | Equity Bancshares, vs. FVCBankcorp |
| Bridgewater Bancshares vs. International Bancshares | Bridgewater Bancshares vs. Finward Bancorp | Bridgewater Bancshares vs. Aquagold International | Bridgewater Bancshares vs. Thrivent High Yield |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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