Correlation Between BayCom Corp and FB Financial
Can any of the company-specific risk be diversified away by investing in both BayCom Corp and FB 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 BayCom Corp and FB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BayCom Corp and FB Financial Corp, you can compare the effects of market volatilities on BayCom Corp and FB 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 BayCom Corp with a short position of FB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BayCom Corp and FB Financial.
Diversification Opportunities for BayCom Corp and FB Financial
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BayCom and FBK is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding BayCom Corp and FB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FB Financial Corp 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 FB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FB Financial Corp has no effect on the direction of BayCom Corp i.e., BayCom Corp and FB Financial go up and down completely randomly.
Pair Corralation between BayCom Corp and FB Financial
Given the investment horizon of 90 days BayCom Corp is expected to generate 0.67 times more return on investment than FB Financial. However, BayCom Corp is 1.48 times less risky than FB Financial. It trades about 0.3 of its potential returns per unit of risk. FB Financial Corp is currently generating about 0.19 per unit of risk. If you would invest 2,485 in BayCom Corp on September 1, 2024 and sell it today you would earn a total of 414.00 from holding BayCom Corp or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BayCom Corp vs. FB Financial Corp
Performance |
| Timeline |
| BayCom Corp |
| FB Financial Corp |
BayCom Corp and FB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BayCom Corp and FB Financial
The main advantage of trading using opposite BayCom Corp and FB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BayCom Corp position performs unexpectedly, FB 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 FB Financial will offset losses from the drop in FB Financial'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 |
| FB Financial vs. Affinity Bancshares | FB Financial vs. Southern California Bancorp | FB Financial vs. Auburn National Bancorporation | FB Financial vs. BayCom Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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