Correlation Between Eagle Financial and BayCom Corp
Can any of the company-specific risk be diversified away by investing in both Eagle Financial 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 Eagle Financial and BayCom Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Financial Services and BayCom Corp, you can compare the effects of market volatilities on Eagle Financial 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 Eagle Financial with a short position of BayCom Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Financial and BayCom Corp.
Diversification Opportunities for Eagle Financial and BayCom Corp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and BayCom is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Financial Services and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and Eagle Financial 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 Eagle Financial Services 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 Eagle Financial i.e., Eagle Financial and BayCom Corp go up and down completely randomly.
Pair Corralation between Eagle Financial and BayCom Corp
Given the investment horizon of 90 days Eagle Financial Services is expected to generate 0.84 times more return on investment than BayCom Corp. However, Eagle Financial Services is 1.19 times less risky than BayCom Corp. It trades about 0.19 of its potential returns per unit of risk. BayCom Corp is currently generating about 0.15 per unit of risk. If you would invest 3,119 in Eagle Financial Services on May 30, 2025 and sell it today you would earn a total of 538.00 from holding Eagle Financial Services or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Financial Services vs. BayCom Corp
Performance |
| Timeline |
| Eagle Financial Services |
| BayCom Corp |
Eagle Financial and BayCom Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Financial and BayCom Corp
The main advantage of trading using opposite Eagle Financial and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Financial 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.The idea behind Eagle Financial Services and BayCom Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BayCom Corp vs. Affinity Bancshares | BayCom Corp vs. Northeast Community Bancorp | BayCom Corp vs. Bayfirst Financial Corp | BayCom Corp vs. Southern California 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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