Correlation Between Aozora Bank and Bridgewater Bancshares

Can any of the company-specific risk be diversified away by investing in both Aozora Bank 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 Aozora Bank and Bridgewater Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aozora Bank and Bridgewater Bancshares Depositary, you can compare the effects of market volatilities on Aozora Bank 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 Aozora Bank with a short position of Bridgewater Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Bridgewater Bancshares.

Diversification Opportunities for Aozora Bank and Bridgewater Bancshares

0.0

Correlation Coefficient

Aozora Bank  Bridgewater Bancshares

Pay attention - limited upside

The 3 months correlation between Aozora and Bridgewater is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and Bridgewater Bancshares Deposit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgewater Bancshares and Aozora Bank 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 Aozora Bank 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 Aozora Bank i.e., Aozora Bank and Bridgewater Bancshares go up and down completely randomly.

Pair Corralation between Aozora Bank and Bridgewater Bancshares

If you would invest  1,858  in Bridgewater Bancshares Depositary on May 7, 2025 and sell it today you would earn a total of  238.00  from holding Bridgewater Bancshares Depositary or generate 12.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aozora Bank  vs.  Bridgewater Bancshares Deposit

Aozora Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aozora Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aozora Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Bridgewater Bancshares

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgewater Bancshares Depositary are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Bridgewater Bancshares reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aozora Bank and Bridgewater Bancshares

The main advantage of trading using opposite Aozora Bank and Bridgewater Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank 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.

The idea behind Aozora Bank and Bridgewater Bancshares Depositary 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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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.