Correlation Between Bayfirst Financial and Bank of Marin

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

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

Diversification Opportunities for Bayfirst Financial and Bank of Marin

-0.26

Correlation Coefficient

Bayfirst Financial  Bank of Marin

Very good diversification

The 3 months correlation between Bayfirst and Bank is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bayfirst Financial Corp and Bank of Marin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Marin and Bayfirst 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 Bayfirst Financial Corp are associated (or correlated) with Bank of Marin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Marin has no effect on the direction of Bayfirst Financial i.e., Bayfirst Financial and Bank of Marin go up and down completely randomly.

Pair Corralation between Bayfirst Financial and Bank of Marin

Given the investment horizon of 90 days Bayfirst Financial Corp is expected to under-perform the Bank of Marin. In addition to that, Bayfirst Financial is 1.65 times more volatile than Bank of Marin. It trades about -0.09 of its total potential returns per unit of risk. Bank of Marin is currently generating about 0.06 per unit of volatility. If you would invest  2,100  in Bank of Marin on May 4, 2025 and sell it today you would earn a total of  122.00  from holding Bank of Marin or generate 5.81% return on investment over 90 days.

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

Bayfirst Financial Corp  vs.  Bank of Marin

Bayfirst Financial Corp

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Bank of Marin

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Marin are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Bank of Marin may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Bayfirst Financial and Bank of Marin

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

The idea behind Bayfirst Financial Corp and Bank of Marin 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.