Correlation Between FVCBankcorp and Bayfirst Financial

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

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

Diversification Opportunities for FVCBankcorp and Bayfirst Financial

-0.24

Correlation Coefficient

FVCBankcorp  Bayfirst Financial

Very good diversification

The 3 months correlation between FVCBankcorp and Bayfirst is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding FVCBankcorp 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 FVCBankcorp 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 FVCBankcorp 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 FVCBankcorp i.e., FVCBankcorp and Bayfirst Financial go up and down completely randomly.

Pair Corralation between FVCBankcorp and Bayfirst Financial

Given the investment horizon of 90 days FVCBankcorp is expected to generate 0.56 times more return on investment than Bayfirst Financial. However, FVCBankcorp is 1.78 times less risky than Bayfirst Financial. It trades about 0.12 of its potential returns per unit of risk. Bayfirst Financial Corp is currently generating about -0.11 per unit of risk. If you would invest  1,144  in FVCBankcorp on May 3, 2025 and sell it today you would earn a total of  137.00  from holding FVCBankcorp or generate 11.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

FVCBankcorp  vs.  Bayfirst Financial Corp

FVCBankcorp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FVCBankcorp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, FVCBankcorp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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.

Pair Trading with FVCBankcorp and Bayfirst Financial

The main advantage of trading using opposite FVCBankcorp and Bayfirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FVCBankcorp 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 FVCBankcorp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.