Correlation Between Bankwell Financial and Finward Bancorp

Can any of the company-specific risk be diversified away by investing in both Bankwell Financial and Finward Bancorp 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 Bankwell Financial and Finward Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bankwell Financial Group and Finward Bancorp, you can compare the effects of market volatilities on Bankwell Financial and Finward Bancorp 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 Bankwell Financial with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankwell Financial and Finward Bancorp.

Diversification Opportunities for Bankwell Financial and Finward Bancorp

-0.78

Correlation Coefficient

Bankwell Financial  Finward Bancorp

Pay attention - limited upside

The 3 months correlation between Bankwell and Finward is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bankwell Financial Group and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp and Bankwell Financial 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 Bankwell Financial Group are associated (or correlated) with Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of Bankwell Financial i.e., Bankwell Financial and Finward Bancorp go up and down completely randomly.

Pair Corralation between Bankwell Financial and Finward Bancorp

Given the investment horizon of 90 days Bankwell Financial Group is expected to generate 1.31 times more return on investment than Finward Bancorp. However, Bankwell Financial is 1.31 times more volatile than Finward Bancorp. It trades about 0.16 of its potential returns per unit of risk. Finward Bancorp is currently generating about -0.11 per unit of risk. If you would invest  3,325  in Bankwell Financial Group on May 6, 2025 and sell it today you would earn a total of  584.00  from holding Bankwell Financial Group or generate 17.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bankwell Financial Group  vs.  Finward Bancorp

Bankwell Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bankwell Financial Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Bankwell Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Finward Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Finward Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Bankwell Financial and Finward Bancorp

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

The idea behind Bankwell Financial Group and Finward Bancorp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.