Correlation Between BayCom Corp and Amalgamated Bank
Can any of the company-specific risk be diversified away by investing in both BayCom Corp and Amalgamated Bank 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 BayCom Corp and Amalgamated Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BayCom Corp and Amalgamated Bank, you can compare the effects of market volatilities on BayCom Corp and Amalgamated Bank 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 BayCom Corp with a short position of Amalgamated Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BayCom Corp and Amalgamated Bank.
Diversification Opportunities for BayCom Corp and Amalgamated Bank
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BayCom and Amalgamated is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding BayCom Corp and Amalgamated Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amalgamated Bank and BayCom Corp 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 BayCom Corp are associated (or correlated) with Amalgamated Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amalgamated Bank has no effect on the direction of BayCom Corp i.e., BayCom Corp and Amalgamated Bank go up and down completely randomly.
Pair Corralation between BayCom Corp and Amalgamated Bank
Given the investment horizon of 90 days BayCom Corp is expected to generate 0.8 times more return on investment than Amalgamated Bank. However, BayCom Corp is 1.25 times less risky than Amalgamated Bank. It trades about -0.08 of its potential returns per unit of risk. Amalgamated Bank is currently generating about -0.08 per unit of risk. If you would invest 2,852 in BayCom Corp on December 1, 2024 and sell it today you would lose (102.00) from holding BayCom Corp or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BayCom Corp vs. Amalgamated Bank
Performance |
| Timeline |
| BayCom Corp |
| Amalgamated Bank |
BayCom Corp and Amalgamated Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BayCom Corp and Amalgamated Bank
The main advantage of trading using opposite BayCom Corp and Amalgamated Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BayCom Corp position performs unexpectedly, Amalgamated Bank 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 Amalgamated Bank will offset losses from the drop in Amalgamated Bank's long position.| BayCom Corp vs. Home Federal Bancorp | BayCom Corp vs. LINKBANCORP | BayCom Corp vs. Community West Bancshares | BayCom Corp vs. First Northwest Bancorp |
| Amalgamated Bank vs. Home Bancorp | Amalgamated Bank vs. Community West Bancshares | Amalgamated Bank vs. First Community | Amalgamated Bank vs. Great Southern 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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