Correlation Between Valley National and Bridgewater Bancshares
Can any of the company-specific risk be diversified away by investing in both Valley National 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 Valley National and Bridgewater Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valley National Bancorp and Bridgewater Bancshares Depositary, you can compare the effects of market volatilities on Valley National 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 Valley National with a short position of Bridgewater Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valley National and Bridgewater Bancshares.
Diversification Opportunities for Valley National and Bridgewater Bancshares
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Valley and Bridgewater is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Valley National Bancorp and Bridgewater Bancshares Deposit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgewater Bancshares and Valley National 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 Valley National Bancorp 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 Valley National i.e., Valley National and Bridgewater Bancshares go up and down completely randomly.
Pair Corralation between Valley National and Bridgewater Bancshares
Considering the 90-day investment horizon Valley National Bancorp is expected to generate 1.58 times more return on investment than Bridgewater Bancshares. However, Valley National is 1.58 times more volatile than Bridgewater Bancshares Depositary. It trades about 0.05 of its potential returns per unit of risk. Bridgewater Bancshares Depositary is currently generating about 0.05 per unit of risk. If you would invest 758.00 in Valley National Bancorp on September 2, 2024 and sell it today you would earn a total of 306.00 from holding Valley National Bancorp or generate 40.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valley National Bancorp vs. Bridgewater Bancshares Deposit
Performance |
| Timeline |
| Valley National Bancorp |
| Bridgewater Bancshares |
Valley National and Bridgewater Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valley National and Bridgewater Bancshares
The main advantage of trading using opposite Valley National and Bridgewater Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valley National 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.| Valley National vs. Fulton Financial | Valley National vs. Webster Financial | Valley National vs. United Bankshares | Valley National vs. FNB Corp |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |