Correlation Between Southern First and BayCom Corp

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

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

Diversification Opportunities for Southern First and BayCom Corp

0.21

Correlation Coefficient

Southern First  BayCom Corp

Modest diversification

The 3 months correlation between Southern and BayCom is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Southern First Bancshares and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom Corp and Southern First 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 Southern First Bancshares 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 Southern First i.e., Southern First and BayCom Corp go up and down completely randomly.

Pair Corralation between Southern First and BayCom Corp

Given the investment horizon of 90 days Southern First Bancshares is expected to generate 1.24 times more return on investment than BayCom Corp. However, Southern First is 1.24 times more volatile than BayCom Corp. It trades about 0.06 of its potential returns per unit of risk. BayCom Corp is currently generating about -0.08 per unit of risk. If you would invest  4,494  in Southern First Bancshares on August 22, 2025 and sell it today you would earn a total of  302.00  from holding Southern First Bancshares or generate 6.72% return on investment over 90 days.

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

Southern First Bancshares  vs.  BayCom Corp

Southern First Bancshares

Risk-Adjusted Performance

Fair

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

BayCom Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days BayCom Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Southern First and BayCom Corp

The main advantage of trading using opposite Southern First and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern First 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 Southern First Bancshares 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.