Correlation Between Tectonic Financial and Bayfirst Financial
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial 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 Tectonic Financial and Bayfirst Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tectonic Financial PR and Bayfirst Financial Corp, you can compare the effects of market volatilities on Tectonic Financial 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 Tectonic Financial with a short position of Bayfirst Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and Bayfirst Financial.
Diversification Opportunities for Tectonic Financial and Bayfirst Financial
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tectonic and Bayfirst is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR 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 Tectonic 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 Tectonic Financial PR 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 Tectonic Financial i.e., Tectonic Financial and Bayfirst Financial go up and down completely randomly.
Pair Corralation between Tectonic Financial and Bayfirst Financial
Assuming the 90 days horizon Tectonic Financial PR is expected to generate 0.2 times more return on investment than Bayfirst Financial. However, Tectonic Financial PR is 5.05 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 -0.04 per unit of risk. If you would invest 1,033 in Tectonic Financial PR on April 24, 2025 and sell it today you would earn a total of 43.00 from holding Tectonic Financial PR or generate 4.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tectonic Financial PR vs. Bayfirst Financial Corp
Performance |
Timeline |
Tectonic Financial |
Bayfirst Financial Corp |
Tectonic Financial and Bayfirst Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tectonic Financial and Bayfirst Financial
The main advantage of trading using opposite Tectonic Financial and Bayfirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial 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.Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary | Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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