Correlation Between NYSE Composite and Bridgewater Bancshares
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Bridgewater Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Bridgewater Bancshares Depositary, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Bridgewater Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Bridgewater Bancshares.
Diversification Opportunities for NYSE Composite and Bridgewater Bancshares
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Bridgewater is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Bridgewater Bancshares Deposit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgewater Bancshares and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Bridgewater Bancshares go up and down completely randomly.
Pair Corralation between NYSE Composite and Bridgewater Bancshares
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.38 times more return on investment than Bridgewater Bancshares. However, NYSE Composite is 2.63 times less risky than Bridgewater Bancshares. It trades about 0.08 of its potential returns per unit of risk. Bridgewater Bancshares Depositary is currently generating about 0.02 per unit of risk. If you would invest 1,546,867 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 474,115 from holding NYSE Composite or generate 30.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Bridgewater Bancshares Deposit
Performance |
| Timeline |
NYSE Composite and Bridgewater Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Bridgewater Bancshares Depositary
Pair trading matchups for Bridgewater Bancshares
Pair Trading with NYSE Composite and Bridgewater Bancshares
The main advantage of trading using opposite NYSE Composite and Bridgewater Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Bridgewater Bancshares vs. CNB Financial | Bridgewater Bancshares vs. First Guaranty Bancshares | Bridgewater Bancshares vs. Dime Community Bancshares | Bridgewater Bancshares vs. Brighthouse Financial |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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