Correlation Between Home Bancorp and BayCom Corp
Can any of the company-specific risk be diversified away by investing in both Home 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 Home 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 Home Bancorp and BayCom Corp, you can compare the effects of market volatilities on Home 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 Home Bancorp with a short position of BayCom Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Bancorp and BayCom Corp.
Diversification Opportunities for Home Bancorp and BayCom Corp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Home and BayCom is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Home Bancorp and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and Home 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 Home 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 Home Bancorp i.e., Home Bancorp and BayCom Corp go up and down completely randomly.
Pair Corralation between Home Bancorp and BayCom Corp
Given the investment horizon of 90 days Home Bancorp is expected to generate 1.53 times less return on investment than BayCom Corp. In addition to that, Home Bancorp is 1.14 times more volatile than BayCom Corp. It trades about 0.03 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 1,807 in BayCom Corp on August 24, 2024 and sell it today you would earn a total of 1,036 from holding BayCom Corp or generate 57.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Bancorp vs. BayCom Corp
Performance |
| Timeline |
| Home Bancorp |
| BayCom Corp |
Home Bancorp and BayCom Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Bancorp and BayCom Corp
The main advantage of trading using opposite Home Bancorp and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home 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.| Home Bancorp vs. Home Federal Bancorp | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. First Financial Northwest | Home Bancorp vs. First Capital |
| BayCom Corp vs. Banco Bradesco SA | BayCom Corp vs. Itau Unibanco Banco | BayCom Corp vs. Banco Santander Brasil | BayCom Corp vs. Western Alliance Bancorporation |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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