Correlation Between BayCom Corp and OP Bancorp
Can any of the company-specific risk be diversified away by investing in both BayCom Corp and OP 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 OP 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 OP Bancorp, you can compare the effects of market volatilities on BayCom Corp and OP 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 OP Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BayCom Corp and OP Bancorp.
Diversification Opportunities for BayCom Corp and OP Bancorp
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BayCom and OPBK is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BayCom Corp and OP Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OP 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 OP Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OP Bancorp has no effect on the direction of BayCom Corp i.e., BayCom Corp and OP Bancorp go up and down completely randomly.
Pair Corralation between BayCom Corp and OP Bancorp
Given the investment horizon of 90 days BayCom Corp is expected to generate 1.77 times less return on investment than OP Bancorp. In addition to that, BayCom Corp is 1.07 times more volatile than OP Bancorp. It trades about 0.07 of its total potential returns per unit of risk. OP Bancorp is currently generating about 0.13 per unit of volatility. If you would invest 1,044 in OP Bancorp on September 3, 2024 and sell it today you would earn a total of 689.00 from holding OP Bancorp or generate 66.0% 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. OP Bancorp
Performance |
| Timeline |
| BayCom Corp |
| OP Bancorp |
BayCom Corp and OP Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BayCom Corp and OP Bancorp
The main advantage of trading using opposite BayCom Corp and OP Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BayCom Corp position performs unexpectedly, OP 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 OP Bancorp will offset losses from the drop in OP 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 |
| OP Bancorp vs. PCB Bancorp | OP Bancorp vs. Hope Bancorp | OP Bancorp vs. RBB Bancorp | OP Bancorp 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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