Correlation Between Bankwell Financial and Dah Sing
Can any of the company-specific risk be diversified away by investing in both Bankwell Financial and Dah Sing 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 Dah Sing 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 Dah Sing Financial, you can compare the effects of market volatilities on Bankwell Financial and Dah Sing 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 Dah Sing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankwell Financial and Dah Sing.
Diversification Opportunities for Bankwell Financial and Dah Sing
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bankwell and Dah is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bankwell Financial Group and Dah Sing Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dah Sing Financial 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 Dah Sing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dah Sing Financial has no effect on the direction of Bankwell Financial i.e., Bankwell Financial and Dah Sing go up and down completely randomly.
Pair Corralation between Bankwell Financial and Dah Sing
Given the investment horizon of 90 days Bankwell Financial Group is expected to under-perform the Dah Sing. In addition to that, Bankwell Financial is 1.65 times more volatile than Dah Sing Financial. It trades about -0.2 of its total potential returns per unit of risk. Dah Sing Financial is currently generating about 0.34 per unit of volatility. If you would invest 952.00 in Dah Sing Financial on September 25, 2024 and sell it today you would earn a total of 88.00 from holding Dah Sing Financial or generate 9.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bankwell Financial Group vs. Dah Sing Financial
Performance |
Timeline |
Bankwell Financial |
Dah Sing Financial |
Bankwell Financial and Dah Sing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bankwell Financial and Dah Sing
The main advantage of trading using opposite Bankwell Financial and Dah Sing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankwell Financial position performs unexpectedly, Dah Sing 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 Dah Sing will offset losses from the drop in Dah Sing's long position.Bankwell Financial vs. Franklin Financial Services | Bankwell Financial vs. The First Bancshares, | Bankwell Financial vs. Home Federal Bancorp | Bankwell Financial vs. Lake Shore Bancorp |
Dah Sing vs. First Bancorp | Dah Sing vs. Franklin Financial Services | Dah Sing vs. National Bank Holdings | Dah Sing vs. Bankwell Financial Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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