Correlation Between Farmers Bank and Bayfirst Financial
Can any of the company-specific risk be diversified away by investing in both Farmers Bank and Bayfirst 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 Farmers Bank and Bayfirst Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Farmers Bank and Bayfirst Financial Corp, you can compare the effects of market volatilities on Farmers Bank and Bayfirst 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 Farmers Bank with a short position of Bayfirst Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bank and Bayfirst Financial.
Diversification Opportunities for Farmers Bank and Bayfirst Financial
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Farmers and Bayfirst is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding The Farmers Bank and Bayfirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayfirst Financial Corp and Farmers Bank 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 The Farmers Bank are associated (or correlated) with Bayfirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayfirst Financial Corp has no effect on the direction of Farmers Bank i.e., Farmers Bank and Bayfirst Financial go up and down completely randomly.
Pair Corralation between Farmers Bank and Bayfirst Financial
Given the investment horizon of 90 days The Farmers Bank is expected to under-perform the Bayfirst Financial. But the otc stock apears to be less risky and, when comparing its historical volatility, The Farmers Bank is 2.08 times less risky than Bayfirst Financial. The otc stock trades about -0.09 of its potential returns per unit of risk. The Bayfirst Financial Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,340 in Bayfirst Financial Corp on September 1, 2024 and sell it today you would lose (23.00) from holding Bayfirst Financial Corp or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Farmers Bank vs. Bayfirst Financial Corp
Performance |
| Timeline |
| Farmers Bank |
| Bayfirst Financial Corp |
Farmers Bank and Bayfirst Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bank and Bayfirst Financial
The main advantage of trading using opposite Farmers Bank and Bayfirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bank position performs unexpectedly, Bayfirst 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 Bayfirst Financial will offset losses from the drop in Bayfirst Financial's long position.| Farmers Bank vs. Piraeus Bank SA | Farmers Bank vs. Turkiye Garanti Bankasi | Farmers Bank vs. Delhi Bank Corp | Farmers Bank vs. Uwharrie Capital Corp |
| Bayfirst Financial vs. Home Federal Bancorp | Bayfirst Financial vs. LINKBANCORP | Bayfirst Financial vs. Affinity Bancshares | Bayfirst 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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