Correlation Between Bankwell Financial and Primis Financial

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

Diversification Opportunities for Bankwell Financial and Primis Financial

0.33

Correlation Coefficient

Bankwell Financial  Primis Financial

Weak diversification

The 3 months correlation between Bankwell and Primis is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bankwell Financial Group and Primis Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primis Financial Corp 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 Primis Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primis Financial Corp has no effect on the direction of Bankwell Financial i.e., Bankwell Financial and Primis Financial go up and down completely randomly.

Pair Corralation between Bankwell Financial and Primis Financial

Given the investment horizon of 90 days Bankwell Financial Group is expected to generate 0.9 times more return on investment than Primis Financial. However, Bankwell Financial Group is 1.11 times less risky than Primis Financial. It trades about -0.02 of its potential returns per unit of risk. Primis Financial Corp is currently generating about -0.13 per unit of risk. If you would invest  3,109  in Bankwell Financial Group on December 29, 2024 and sell it today you would lose (96.00) from holding Bankwell Financial Group or give up 3.09% of portfolio value over 90 days.

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

Bankwell Financial Group  vs.  Primis Financial Corp

Bankwell Financial

Risk-Adjusted Performance

Very Weak

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

Primis Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Primis Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bankwell Financial and Primis Financial

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

The idea behind Bankwell Financial Group and Primis Financial Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.