Correlation Between Customers Bancorp and BayCom Corp
Can any of the company-specific risk be diversified away by investing in both Customers Bancorp and BayCom Corp 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 Customers Bancorp and BayCom Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Customers Bancorp and BayCom Corp, you can compare the effects of market volatilities on Customers Bancorp and BayCom Corp 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 Customers Bancorp with a short position of BayCom Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Customers Bancorp and BayCom Corp.
Diversification Opportunities for Customers Bancorp and BayCom Corp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Customers and BayCom is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Customers Bancorp and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and Customers Bancorp 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 Customers Bancorp are associated (or correlated) with BayCom Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BayCom Corp has no effect on the direction of Customers Bancorp i.e., Customers Bancorp and BayCom Corp go up and down completely randomly.
Pair Corralation between Customers Bancorp and BayCom Corp
Given the investment horizon of 90 days Customers Bancorp is expected to generate 1.94 times more return on investment than BayCom Corp. However, Customers Bancorp is 1.94 times more volatile than BayCom Corp. It trades about 0.23 of its potential returns per unit of risk. BayCom Corp is currently generating about 0.32 per unit of risk. If you would invest 4,542 in Customers Bancorp on August 30, 2024 and sell it today you would earn a total of 1,142 from holding Customers Bancorp or generate 25.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Customers Bancorp vs. BayCom Corp
Performance |
| Timeline |
| Customers Bancorp |
| BayCom Corp |
Customers Bancorp and BayCom Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Customers Bancorp and BayCom Corp
The main advantage of trading using opposite Customers Bancorp and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Customers Bancorp position performs unexpectedly, BayCom Corp 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 BayCom Corp will offset losses from the drop in BayCom Corp's long position.| Customers Bancorp vs. Glacier Bancorp | Customers Bancorp vs. Capitol Federal Financial | Customers Bancorp vs. Byline Bancorp | Customers Bancorp vs. Cathay General Bancorp |
| BayCom Corp vs. Home Federal Bancorp | BayCom Corp vs. LINKBANCORP | BayCom Corp vs. Community West Bancshares | BayCom Corp vs. First Northwest Bancorp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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