Correlation Between Middlefield Banc and Bankwell Financial
Can any of the company-specific risk be diversified away by investing in both Middlefield Banc 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 Middlefield Banc and Bankwell Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middlefield Banc and Bankwell Financial Group, you can compare the effects of market volatilities on Middlefield Banc 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 Middlefield Banc with a short position of Bankwell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middlefield Banc and Bankwell Financial.
Diversification Opportunities for Middlefield Banc and Bankwell Financial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Middlefield and Bankwell is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Banc and Bankwell Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankwell Financial and Middlefield Banc 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 Middlefield Banc 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 Middlefield Banc i.e., Middlefield Banc and Bankwell Financial go up and down completely randomly.
Pair Corralation between Middlefield Banc and Bankwell Financial
Given the investment horizon of 90 days Middlefield Banc is expected to under-perform the Bankwell Financial. In addition to that, Middlefield Banc is 1.27 times more volatile than Bankwell Financial Group. It trades about 0.0 of its total potential returns per unit of risk. Bankwell Financial Group is currently generating about 0.08 per unit of volatility. If you would invest 3,030 in Bankwell Financial Group on November 2, 2024 and sell it today you would earn a total of 95.00 from holding Bankwell Financial Group or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Middlefield Banc vs. Bankwell Financial Group
Performance |
| Timeline |
| Middlefield Banc |
| Bankwell Financial |
Middlefield Banc and Bankwell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Middlefield Banc and Bankwell Financial
The main advantage of trading using opposite Middlefield Banc and Bankwell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlefield Banc 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.| Middlefield Banc vs. Home Federal Bancorp | Middlefield Banc vs. First Northwest Bancorp | Middlefield Banc vs. Lake Shore Bancorp | Middlefield Banc vs. Community West Bancshares |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |