Correlation Between 1ST SUMMIT and Bayfirst Financial
Can any of the company-specific risk be diversified away by investing in both 1ST SUMMIT 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 1ST SUMMIT and Bayfirst Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1ST SUMMIT BANCORP and Bayfirst Financial Corp, you can compare the effects of market volatilities on 1ST SUMMIT 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 1ST SUMMIT with a short position of Bayfirst Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1ST SUMMIT and Bayfirst Financial.
Diversification Opportunities for 1ST SUMMIT and Bayfirst Financial
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between 1ST and Bayfirst is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding 1ST SUMMIT BANCORP 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 1ST SUMMIT 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 1ST SUMMIT BANCORP 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 1ST SUMMIT i.e., 1ST SUMMIT and Bayfirst Financial go up and down completely randomly.
Pair Corralation between 1ST SUMMIT and Bayfirst Financial
Given the investment horizon of 90 days 1ST SUMMIT BANCORP is expected to generate 0.35 times more return on investment than Bayfirst Financial. However, 1ST SUMMIT BANCORP is 2.87 times less risky than Bayfirst Financial. It trades about -0.03 of its potential returns per unit of risk. Bayfirst Financial Corp is currently generating about -0.03 per unit of risk. If you would invest 2,788 in 1ST SUMMIT BANCORP on September 1, 2024 and sell it today you would lose (13.00) from holding 1ST SUMMIT BANCORP or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1ST SUMMIT BANCORP vs. Bayfirst Financial Corp
Performance |
| Timeline |
| 1ST SUMMIT BANCORP |
| Bayfirst Financial Corp |
1ST SUMMIT and Bayfirst Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1ST SUMMIT and Bayfirst Financial
The main advantage of trading using opposite 1ST SUMMIT and Bayfirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1ST SUMMIT 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.| 1ST SUMMIT vs. Apollo Bancorp | 1ST SUMMIT vs. Oregon Pacific Bancorp | 1ST SUMMIT vs. The Farmers Bank | 1ST SUMMIT vs. Community Bankers |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |