Correlation Between BayCom Corp and Eagle Bancorp
Can any of the company-specific risk be diversified away by investing in both BayCom Corp and Eagle Bancorp 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 Eagle Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BayCom Corp and Eagle Bancorp Montana, you can compare the effects of market volatilities on BayCom Corp and Eagle Bancorp 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 Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BayCom Corp and Eagle Bancorp.
Diversification Opportunities for BayCom Corp and Eagle Bancorp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BayCom and Eagle is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding BayCom Corp and Eagle Bancorp Montana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp Montana 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 Eagle Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bancorp Montana has no effect on the direction of BayCom Corp i.e., BayCom Corp and Eagle Bancorp go up and down completely randomly.
Pair Corralation between BayCom Corp and Eagle Bancorp
Given the investment horizon of 90 days BayCom Corp is expected to generate 1.74 times more return on investment than Eagle Bancorp. However, BayCom Corp is 1.74 times more volatile than Eagle Bancorp Montana. It trades about 0.22 of its potential returns per unit of risk. Eagle Bancorp Montana is currently generating about 0.23 per unit of risk. If you would invest 2,244 in BayCom Corp on September 2, 2024 and sell it today you would earn a total of 655.00 from holding BayCom Corp or generate 29.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BayCom Corp vs. Eagle Bancorp Montana
Performance |
| Timeline |
| BayCom Corp |
| Eagle Bancorp Montana |
BayCom Corp and Eagle Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BayCom Corp and Eagle Bancorp
The main advantage of trading using opposite BayCom Corp and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BayCom Corp position performs unexpectedly, Eagle Bancorp 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 Eagle Bancorp will offset losses from the drop in Eagle Bancorp's long position.| BayCom Corp vs. Affinity Bancshares | BayCom Corp vs. Auburn National Bancorporation | BayCom Corp vs. First Community | BayCom Corp vs. LINKBANCORP |
| Eagle Bancorp vs. Affinity Bancshares | Eagle Bancorp vs. Auburn National Bancorporation | Eagle Bancorp vs. First Community | Eagle Bancorp vs. LINKBANCORP |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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