Correlation Between Grand River and BayCom Corp
Can any of the company-specific risk be diversified away by investing in both Grand River 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 Grand River and BayCom Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand River Commerce and BayCom Corp, you can compare the effects of market volatilities on Grand River 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 Grand River with a short position of BayCom Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand River and BayCom Corp.
Diversification Opportunities for Grand River and BayCom Corp
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grand and BayCom is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Grand River Commerce and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and Grand River 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 Grand River Commerce 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 Grand River i.e., Grand River and BayCom Corp go up and down completely randomly.
Pair Corralation between Grand River and BayCom Corp
Given the investment horizon of 90 days Grand River Commerce is expected to under-perform the BayCom Corp. In addition to that, Grand River is 1.13 times more volatile than BayCom Corp. It trades about -0.05 of its total potential returns per unit of risk. BayCom Corp is currently generating about 0.06 per unit of volatility. If you would invest 1,860 in BayCom Corp on September 3, 2024 and sell it today you would earn a total of 1,039 from holding BayCom Corp or generate 55.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand River Commerce vs. BayCom Corp
Performance |
| Timeline |
| Grand River Commerce |
| BayCom Corp |
Grand River and BayCom Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand River and BayCom Corp
The main advantage of trading using opposite Grand River and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand River 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.| Grand River vs. First Hawaiian | Grand River vs. Central Pacific Financial | Grand River vs. Territorial Bancorp | Grand River vs. Comerica |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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