Correlation Between ACNB and BayCom Corp

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

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

Diversification Opportunities for ACNB and BayCom Corp

0.72

Correlation Coefficient

ACNB  BayCom Corp

Poor diversification

The 3 months correlation between ACNB and BayCom is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and ACNB 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 ACNB Corporation 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 ACNB i.e., ACNB and BayCom Corp go up and down completely randomly.

Pair Corralation between ACNB and BayCom Corp

Given the investment horizon of 90 days ACNB Corporation is expected to under-perform the BayCom Corp. But the stock apears to be less risky and, when comparing its historical volatility, ACNB Corporation is 1.13 times less risky than BayCom Corp. The stock trades about -0.01 of its potential returns per unit of risk. The BayCom Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,643  in BayCom Corp on May 2, 2025 and sell it today you would earn a total of  18.00  from holding BayCom Corp or generate 0.68% return on investment over 90 days.

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

ACNB Corp.  vs.  BayCom Corp

ACNB

Risk-Adjusted Performance

Very Weak

Over the last 90 days ACNB Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ACNB is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BayCom Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BayCom Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, BayCom Corp is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ACNB and BayCom Corp

The main advantage of trading using opposite ACNB and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB 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 ACNB Corporation 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.