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

-0.26

Correlation Coefficient

Tectonic Financial  Bayfirst Financial

Very good diversification

The 3 months correlation between Tectonic and Bayfirst is -0.26. 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 is expected to generate 2.64 times less return on investment than Bayfirst Financial. But when comparing it to its historical volatility, Tectonic Financial PR is 4.19 times less risky than Bayfirst Financial. It trades about 0.06 of its potential returns per unit of risk. Bayfirst Financial Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,457  in Bayfirst Financial Corp on April 25, 2025 and sell it today you would earn a total of  62.00  from holding Bayfirst Financial Corp or generate 4.26% return on investment over 90 days.

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

Tectonic Financial PR  vs.  Bayfirst Financial Corp

Tectonic Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tectonic Financial PR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Tectonic Financial is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Bayfirst Financial Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bayfirst Financial Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Bayfirst Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

The idea behind Tectonic Financial PR 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..