Correlation Between Oak Valley and Bankwell Financial
Can any of the company-specific risk be diversified away by investing in both Oak Valley 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 Oak Valley and Bankwell Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Valley Bancorp and Bankwell Financial Group, you can compare the effects of market volatilities on Oak Valley 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 Oak Valley with a short position of Bankwell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Valley and Bankwell Financial.
Diversification Opportunities for Oak Valley and Bankwell Financial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oak and Bankwell is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Oak Valley Bancorp and Bankwell Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankwell Financial and Oak Valley 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 Oak Valley Bancorp 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 Oak Valley i.e., Oak Valley and Bankwell Financial go up and down completely randomly.
Pair Corralation between Oak Valley and Bankwell Financial
Given the investment horizon of 90 days Oak Valley is expected to generate 1.28 times less return on investment than Bankwell Financial. But when comparing it to its historical volatility, Oak Valley Bancorp is 1.41 times less risky than Bankwell Financial. It trades about 0.3 of its potential returns per unit of risk. Bankwell Financial Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,884 in Bankwell Financial Group on August 27, 2024 and sell it today you would earn a total of 570.00 from holding Bankwell Financial Group or generate 19.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oak Valley Bancorp vs. Bankwell Financial Group
Performance |
| Timeline |
| Oak Valley Bancorp |
| Bankwell Financial |
Oak Valley and Bankwell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Valley and Bankwell Financial
The main advantage of trading using opposite Oak Valley and Bankwell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Valley 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.| Oak Valley vs. Fifth Third Bancorp | Oak Valley vs. Zions Bancorporation | Oak Valley vs. Huntington Bancshares Incorporated | Oak Valley vs. Comerica |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |