Correlation Between Finward Bancorp and BayCom Corp

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

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

Diversification Opportunities for Finward Bancorp and BayCom Corp

-0.7

Correlation Coefficient

Finward Bancorp  BayCom Corp

Excellent diversification

The 3 months correlation between Finward and BayCom is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and Finward Bancorp 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 Finward Bancorp 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 Finward Bancorp i.e., Finward Bancorp and BayCom Corp go up and down completely randomly.

Pair Corralation between Finward Bancorp and BayCom Corp

Given the investment horizon of 90 days Finward Bancorp is expected to under-perform the BayCom Corp. But the stock apears to be less risky and, when comparing its historical volatility, Finward Bancorp is 1.16 times less risky than BayCom Corp. The stock trades about -0.12 of its potential returns per unit of risk. The BayCom Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,615  in BayCom Corp on May 3, 2025 and sell it today you would earn a total of  86.00  from holding BayCom Corp or generate 3.29% return on investment over 90 days.

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

Finward Bancorp  vs.  BayCom Corp

Finward Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Finward Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

BayCom Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BayCom Corp are ranked lower than 3 (%) 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 Finward Bancorp and BayCom Corp

The main advantage of trading using opposite Finward Bancorp and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp 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 Finward Bancorp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.