Correlation Between BayCom Corp and Capital Bancorp

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

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

Diversification Opportunities for BayCom Corp and Capital Bancorp

0.94

Correlation Coefficient

BayCom Corp  Capital Bancorp

Almost no diversification

The 3 months correlation between BayCom and Capital is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding BayCom Corp and Capital Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Bancorp 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 Capital Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Bancorp has no effect on the direction of BayCom Corp i.e., BayCom Corp and Capital Bancorp go up and down completely randomly.

Pair Corralation between BayCom Corp and Capital Bancorp

Given the investment horizon of 90 days BayCom Corp is expected to generate 0.81 times more return on investment than Capital Bancorp. However, BayCom Corp is 1.23 times less risky than Capital Bancorp. It trades about 0.22 of its potential returns per unit of risk. Capital Bancorp is currently generating about 0.16 per unit of risk. If you would invest  2,317  in BayCom Corp on September 13, 2024 and sell it today you would earn a total of  624.00  from holding BayCom Corp or generate 26.93% return on investment over 90 days.

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

BayCom Corp  vs.  Capital Bancorp

BayCom Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BayCom Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting primary indicators, BayCom Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Capital Bancorp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Bancorp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Capital Bancorp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BayCom Corp and Capital Bancorp

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

The idea behind BayCom Corp and Capital Bancorp 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.

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.