Correlation Between BayCom Corp and Texas Capital
Can any of the company-specific risk be diversified away by investing in both BayCom Corp and Texas Capital 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 Texas Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BayCom Corp and Texas Capital Bancshares, you can compare the effects of market volatilities on BayCom Corp and Texas Capital 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 Texas Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BayCom Corp and Texas Capital.
Diversification Opportunities for BayCom Corp and Texas Capital
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BayCom and Texas is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding BayCom Corp and Texas Capital Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Capital Bancshares 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 Texas Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Capital Bancshares has no effect on the direction of BayCom Corp i.e., BayCom Corp and Texas Capital go up and down completely randomly.
Pair Corralation between BayCom Corp and Texas Capital
Given the investment horizon of 90 days BayCom Corp is expected to generate 0.87 times more return on investment than Texas Capital. However, BayCom Corp is 1.14 times less risky than Texas Capital. It trades about 0.3 of its potential returns per unit of risk. Texas Capital Bancshares is currently generating about 0.24 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. Texas Capital Bancshares
Performance |
| Timeline |
| BayCom Corp |
| Texas Capital Bancshares |
BayCom Corp and Texas Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BayCom Corp and Texas Capital
The main advantage of trading using opposite BayCom Corp and Texas Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BayCom Corp position performs unexpectedly, Texas Capital 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 Texas Capital will offset losses from the drop in Texas Capital'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 |
| Texas Capital vs. Affinity Bancshares | Texas Capital vs. Southern California Bancorp | Texas Capital vs. Auburn National Bancorporation | Texas Capital 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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