Correlation Between BOK Financial and Bayfirst Financial

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

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

Diversification Opportunities for BOK Financial and Bayfirst Financial

0.18

Correlation Coefficient

BOK Financial  Bayfirst Financial

Average diversification

The 3 months correlation between BOK and Bayfirst is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BOK Financial and Bayfirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayfirst Financial Corp and BOK 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 BOK Financial are associated (or correlated) with Bayfirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayfirst Financial Corp has no effect on the direction of BOK Financial i.e., BOK Financial and Bayfirst Financial go up and down completely randomly.

Pair Corralation between BOK Financial and Bayfirst Financial

Given the investment horizon of 90 days BOK Financial is expected to generate 1.04 times more return on investment than Bayfirst Financial. However, BOK Financial is 1.04 times more volatile than Bayfirst Financial Corp. It trades about 0.07 of its potential returns per unit of risk. Bayfirst Financial Corp is currently generating about 0.0 per unit of risk. If you would invest  10,530  in BOK Financial on September 20, 2024 and sell it today you would earn a total of  905.00  from holding BOK Financial or generate 8.59% return on investment over 90 days.

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

BOK Financial  vs.  Bayfirst Financial Corp

BOK Financial

Risk-Adjusted Performance

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BOK Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward-looking signals, BOK Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bayfirst Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bayfirst Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Bayfirst Financial is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BOK Financial and Bayfirst Financial

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

The idea behind BOK Financial and Bayfirst Financial 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.