Correlation Between Auburn National and BayCom Corp
Can any of the company-specific risk be diversified away by investing in both Auburn National and BayCom Corp 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 Auburn National and BayCom Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auburn National Bancorporation and BayCom Corp, you can compare the effects of market volatilities on Auburn National and BayCom Corp 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 Auburn National with a short position of BayCom Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and BayCom Corp.
Diversification Opportunities for Auburn National and BayCom Corp
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auburn and BayCom is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and Auburn National 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 Auburn National Bancorporation are associated (or correlated) with BayCom Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BayCom Corp has no effect on the direction of Auburn National i.e., Auburn National and BayCom Corp go up and down completely randomly.
Pair Corralation between Auburn National and BayCom Corp
Given the investment horizon of 90 days Auburn National Bancorporation is expected to under-perform the BayCom Corp. But the stock apears to be less risky and, when comparing its historical volatility, Auburn National Bancorporation is 1.02 times less risky than BayCom Corp. The stock trades about -0.08 of its potential returns per unit of risk. The BayCom Corp is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 2,749 in BayCom Corp on October 20, 2024 and sell it today you would lose (90.00) from holding BayCom Corp or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auburn National Bancorp. vs. BayCom Corp
Performance |
| Timeline |
| Auburn National Banc |
| BayCom Corp |
Auburn National and BayCom Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and BayCom Corp
The main advantage of trading using opposite Auburn National and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, BayCom Corp 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 BayCom Corp will offset losses from the drop in BayCom Corp's long position.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California Bancorp |
| BayCom Corp vs. Home Federal Bancorp | BayCom Corp vs. LINKBANCORP | BayCom Corp vs. Community West Bancshares | BayCom Corp vs. First Northwest Bancorp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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