Correlation Between Globalfoundries and Bankwell Financial
Can any of the company-specific risk be diversified away by investing in both Globalfoundries and Bankwell Financial 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 Globalfoundries and Bankwell Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and Bankwell Financial Group, you can compare the effects of market volatilities on Globalfoundries and Bankwell Financial 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 Globalfoundries with a short position of Bankwell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and Bankwell Financial.
Diversification Opportunities for Globalfoundries and Bankwell Financial
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globalfoundries and Bankwell is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and Bankwell Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankwell Financial and Globalfoundries 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 Globalfoundries are associated (or correlated) with Bankwell Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankwell Financial has no effect on the direction of Globalfoundries i.e., Globalfoundries and Bankwell Financial go up and down completely randomly.
Pair Corralation between Globalfoundries and Bankwell Financial
Considering the 90-day investment horizon Globalfoundries is expected to generate 0.98 times more return on investment than Bankwell Financial. However, Globalfoundries is 1.02 times less risky than Bankwell Financial. It trades about -0.07 of its potential returns per unit of risk. Bankwell Financial Group is currently generating about -0.1 per unit of risk. If you would invest 4,403 in Globalfoundries on October 23, 2024 and sell it today you would lose (135.00) from holding Globalfoundries or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globalfoundries vs. Bankwell Financial Group
Performance |
| Timeline |
| Globalfoundries |
| Bankwell Financial |
Globalfoundries and Bankwell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalfoundries and Bankwell Financial
The main advantage of trading using opposite Globalfoundries and Bankwell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries position performs unexpectedly, Bankwell Financial 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 Bankwell Financial will offset losses from the drop in Bankwell Financial's long position.| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
| Bankwell Financial vs. Franklin Financial Services | Bankwell Financial vs. The First Bancshares, | Bankwell Financial vs. Home Federal Bancorp | Bankwell Financial vs. Lake Shore Bancorp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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