Correlation Between Bridgewater Bancshares and Aozora Bank

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

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

Diversification Opportunities for Bridgewater Bancshares and Aozora Bank

0.0

Correlation Coefficient

Bridgewater Bancshares  Aozora Bank

Pay attention - limited upside

The 3 months correlation between Bridgewater and Aozora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bridgewater Bancshares Deposit and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank 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 Depositary are associated (or correlated) with Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of Bridgewater Bancshares i.e., Bridgewater Bancshares and Aozora Bank go up and down completely randomly.

Pair Corralation between Bridgewater Bancshares and Aozora Bank

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

Bridgewater Bancshares Deposit  vs.  Aozora Bank

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.

Aozora Bank

Risk-Adjusted Performance

Weakest

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.

Pair Trading with Bridgewater Bancshares and Aozora Bank

The main advantage of trading using opposite Bridgewater Bancshares and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgewater Bancshares position performs unexpectedly, Aozora Bank 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.

The idea behind Bridgewater Bancshares Depositary and Aozora Bank 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.