Correlation Between First Business and Bayfirst Financial

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

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

Diversification Opportunities for First Business and Bayfirst Financial

-0.28

Correlation Coefficient

First Business  Bayfirst Financial

Very good diversification

The 3 months correlation between First and Bayfirst is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding First Business 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 First Business 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 First Business 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 First Business i.e., First Business and Bayfirst Financial go up and down completely randomly.

Pair Corralation between First Business and Bayfirst Financial

Given the investment horizon of 90 days First Business Financial is expected to generate 0.29 times more return on investment than Bayfirst Financial. However, First Business Financial is 3.46 times less risky than Bayfirst Financial. It trades about 0.07 of its potential returns per unit of risk. Bayfirst Financial Corp is currently generating about 0.02 per unit of risk. If you would invest  4,894  in First Business Financial on August 18, 2025 and sell it today you would earn a total of  333.00  from holding First Business Financial or generate 6.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

First Business Financial  vs.  Bayfirst Financial Corp

First Business Financial

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in First Business Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, First Business may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Bayfirst Financial Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bayfirst Financial Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Bayfirst Financial may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with First Business and Bayfirst Financial

The main advantage of trading using opposite First Business and Bayfirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Business 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 First Business 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.