Correlation Between Regions Financial and BayCom Corp

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

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

Diversification Opportunities for Regions Financial and BayCom Corp

0.79

Correlation Coefficient

Regions Financial  BayCom Corp

Poor diversification

The 3 months correlation between Regions and BayCom is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and Regions 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 Regions Financial 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 Regions Financial i.e., Regions Financial and BayCom Corp go up and down completely randomly.

Pair Corralation between Regions Financial and BayCom Corp

Allowing for the 90-day total investment horizon Regions Financial is expected to generate 1.06 times more return on investment than BayCom Corp. However, Regions Financial is 1.06 times more volatile than BayCom Corp. It trades about 0.2 of its potential returns per unit of risk. BayCom Corp is currently generating about 0.04 per unit of risk. If you would invest  2,086  in Regions Financial on May 3, 2025 and sell it today you would earn a total of  447.00  from holding Regions Financial or generate 21.43% return on investment over 90 days.

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

Regions Financial  vs.  BayCom Corp

Regions Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Regions Financial are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Regions Financial reported solid returns over the last few months and may actually be approaching a breakup point.

BayCom Corp

Risk-Adjusted Performance

Insignificant

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 Regions Financial and BayCom Corp

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

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.