Correlation Between BayCom Corp and ECB Bancorp
Can any of the company-specific risk be diversified away by investing in both BayCom Corp and ECB 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 ECB 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 ECB Bancorp, you can compare the effects of market volatilities on BayCom Corp and ECB 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 ECB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BayCom Corp and ECB Bancorp.
Diversification Opportunities for BayCom Corp and ECB Bancorp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BayCom and ECB is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BayCom Corp and ECB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECB Bancorp 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 ECB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECB Bancorp has no effect on the direction of BayCom Corp i.e., BayCom Corp and ECB Bancorp go up and down completely randomly.
Pair Corralation between BayCom Corp and ECB Bancorp
Given the investment horizon of 90 days BayCom Corp is expected to generate 1.35 times more return on investment than ECB Bancorp. However, BayCom Corp is 1.35 times more volatile than ECB Bancorp. It trades about 0.14 of its potential returns per unit of risk. ECB Bancorp is currently generating about 0.13 per unit of risk. If you would invest 1,996 in BayCom Corp on September 3, 2024 and sell it today you would earn a total of 903.00 from holding BayCom Corp or generate 45.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BayCom Corp vs. ECB Bancorp
Performance |
| Timeline |
| BayCom Corp |
| ECB Bancorp |
BayCom Corp and ECB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BayCom Corp and ECB Bancorp
The main advantage of trading using opposite BayCom Corp and ECB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BayCom Corp position performs unexpectedly, ECB 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 ECB Bancorp will offset losses from the drop in ECB Bancorp'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 |
| ECB Bancorp vs. JPMorgan Chase Co | ECB Bancorp vs. Citigroup | ECB Bancorp vs. Wells Fargo | ECB Bancorp vs. Toronto Dominion Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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