Correlation Between Tectonic Financial and BayCom Corp
Can any of the company-specific risk be diversified away by investing in both Tectonic 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 Tectonic 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 Tectonic Financial PR and BayCom Corp, you can compare the effects of market volatilities on Tectonic 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 Tectonic Financial with a short position of BayCom Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and BayCom Corp.
Diversification Opportunities for Tectonic Financial and BayCom Corp
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tectonic and BayCom is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and Tectonic 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 Tectonic Financial PR 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 Tectonic Financial i.e., Tectonic Financial and BayCom Corp go up and down completely randomly.
Pair Corralation between Tectonic Financial and BayCom Corp
Assuming the 90 days horizon Tectonic Financial is expected to generate 1.99 times less return on investment than BayCom Corp. But when comparing it to its historical volatility, Tectonic Financial PR is 2.48 times less risky than BayCom Corp. It trades about 0.09 of its potential returns per unit of risk. BayCom Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,568 in BayCom Corp on April 27, 2025 and sell it today you would earn a total of 172.00 from holding BayCom Corp or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tectonic Financial PR vs. BayCom Corp
Performance |
| Timeline |
| Tectonic Financial |
| BayCom Corp |
Tectonic Financial and BayCom Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and BayCom Corp
The main advantage of trading using opposite Tectonic Financial and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic 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.| Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary | Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants |
| 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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