Correlation Between Bankwell Financial and First United

Can any of the company-specific risk be diversified away by investing in both Bankwell Financial and First United 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 First United 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 First United, you can compare the effects of market volatilities on Bankwell Financial and First United 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 First United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankwell Financial and First United.

Diversification Opportunities for Bankwell Financial and First United

0.88

Correlation Coefficient

Bankwell Financial  First United

Very poor diversification

The 3 months correlation between Bankwell and First is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bankwell Financial Group and First United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First United 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 First United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First United has no effect on the direction of Bankwell Financial i.e., Bankwell Financial and First United go up and down completely randomly.

Pair Corralation between Bankwell Financial and First United

Given the investment horizon of 90 days Bankwell Financial Group is expected to generate 1.56 times more return on investment than First United. However, Bankwell Financial is 1.56 times more volatile than First United. It trades about -0.04 of its potential returns per unit of risk. First United is currently generating about -0.23 per unit of risk. If you would invest  4,782  in Bankwell Financial Group on October 10, 2025 and sell it today you would lose (92.00) from holding Bankwell Financial Group or give up 1.92% of portfolio value over 90 days.

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

Bankwell Financial Group  vs.  First United

Bankwell Financial

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Bankwell Financial Group are ranked lower than 10 (%) 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.

First United

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in First United are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, First United may actually be approaching a critical reversion point that can send shares even higher in February 2026.

Pair Trading with Bankwell Financial and First United

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

The idea behind Bankwell Financial Group and First United 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.