Correlation Between Bridgewater Bancshares and Ffbw
Can any of the company-specific risk be diversified away by investing in both Bridgewater Bancshares and Ffbw 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 Bridgewater Bancshares and Ffbw into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgewater Bancshares and Ffbw Inc, you can compare the effects of market volatilities on Bridgewater Bancshares and Ffbw 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 Bridgewater Bancshares with a short position of Ffbw. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgewater Bancshares and Ffbw.
Diversification Opportunities for Bridgewater Bancshares and Ffbw
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bridgewater and Ffbw is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bridgewater Bancshares and Ffbw Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ffbw Inc and Bridgewater Bancshares 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 Bridgewater Bancshares are associated (or correlated) with Ffbw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ffbw Inc has no effect on the direction of Bridgewater Bancshares i.e., Bridgewater Bancshares and Ffbw go up and down completely randomly.
Pair Corralation between Bridgewater Bancshares and Ffbw
If you would invest 1,178 in Ffbw Inc on January 20, 2024 and sell it today you would earn a total of 0.00 from holding Ffbw Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bridgewater Bancshares vs. Ffbw Inc
Performance |
| Timeline |
| Bridgewater Bancshares |
| Ffbw Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bridgewater Bancshares and Ffbw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgewater Bancshares and Ffbw
The main advantage of trading using opposite Bridgewater Bancshares and Ffbw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgewater Bancshares position performs unexpectedly, Ffbw 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 Ffbw will offset losses from the drop in Ffbw's long position.The idea behind Bridgewater Bancshares and Ffbw Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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