Correlation Between BayCom Corp and LINKBANCORP

Can any of the company-specific risk be diversified away by investing in both BayCom Corp and LINKBANCORP 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 BayCom Corp and LINKBANCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BayCom Corp and LINKBANCORP, you can compare the effects of market volatilities on BayCom Corp and LINKBANCORP 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 BayCom Corp with a short position of LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of BayCom Corp and LINKBANCORP.

Diversification Opportunities for BayCom Corp and LINKBANCORP

0.54

Correlation Coefficient

BayCom Corp  LINKBANCORP

Very weak diversification

The 3 months correlation between BayCom and LINKBANCORP is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding BayCom Corp and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and BayCom Corp 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 BayCom Corp are associated (or correlated) with LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of BayCom Corp i.e., BayCom Corp and LINKBANCORP go up and down completely randomly.

Pair Corralation between BayCom Corp and LINKBANCORP

Given the investment horizon of 90 days BayCom Corp is expected to generate 1.03 times more return on investment than LINKBANCORP. However, BayCom Corp is 1.03 times more volatile than LINKBANCORP. It trades about -0.02 of its potential returns per unit of risk. LINKBANCORP is currently generating about -0.05 per unit of risk. If you would invest  2,654  in BayCom Corp on December 30, 2024 and sell it today you would lose (104.00) from holding BayCom Corp or give up 3.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BayCom Corp  vs.  LINKBANCORP

BayCom Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days BayCom Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, BayCom Corp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

LINKBANCORP

Risk-Adjusted Performance

Very Weak

Over the last 90 days LINKBANCORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with BayCom Corp and LINKBANCORP

The main advantage of trading using opposite BayCom Corp and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BayCom Corp position performs unexpectedly, LINKBANCORP 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 LINKBANCORP will offset losses from the drop in LINKBANCORP's long position.

The idea behind BayCom Corp and LINKBANCORP 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.