Correlation Between Inter Co and Bankwell Financial
Can any of the company-specific risk be diversified away by investing in both Inter Co 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 Inter Co and Bankwell Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Co Class and Bankwell Financial Group, you can compare the effects of market volatilities on Inter Co 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 Inter Co with a short position of Bankwell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Co and Bankwell Financial.
Diversification Opportunities for Inter Co and Bankwell Financial
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inter and Bankwell is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Inter Co Class and Bankwell Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankwell Financial and Inter Co 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 Inter Co Class 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 Inter Co i.e., Inter Co and Bankwell Financial go up and down completely randomly.
Pair Corralation between Inter Co and Bankwell Financial
Given the investment horizon of 90 days Inter Co Class is expected to under-perform the Bankwell Financial. In addition to that, Inter Co is 2.54 times more volatile than Bankwell Financial Group. It trades about -0.33 of its total potential returns per unit of risk. Bankwell Financial Group is currently generating about 0.01 per unit of volatility. If you would invest 3,260 in Bankwell Financial Group on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Bankwell Financial Group or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inter Co Class vs. Bankwell Financial Group
Performance |
| Timeline |
| Inter Co Class |
| Bankwell Financial |
Inter Co and Bankwell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inter Co and Bankwell Financial
The main advantage of trading using opposite Inter Co and Bankwell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Co 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.| Inter Co vs. Community West Bancshares | Inter Co vs. First Financial Northwest | Inter Co vs. First Northwest Bancorp | Inter Co vs. First Capital |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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