Correlation Between Byline Bancorp and Business First
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Business First 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 Byline Bancorp and Business First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Business First Bancshares, you can compare the effects of market volatilities on Byline Bancorp and Business First 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 Byline Bancorp with a short position of Business First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Business First.
Diversification Opportunities for Byline Bancorp and Business First
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Byline and Business is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Business First Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Business First Bancshares and Byline Bancorp 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 Byline Bancorp are associated (or correlated) with Business First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Business First Bancshares has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Business First go up and down completely randomly.
Pair Corralation between Byline Bancorp and Business First
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.88 times more return on investment than Business First. However, Byline Bancorp is 1.14 times less risky than Business First. It trades about 0.07 of its potential returns per unit of risk. Business First Bancshares is currently generating about 0.05 per unit of risk. If you would invest 2,168 in Byline Bancorp on November 9, 2024 and sell it today you would earn a total of 854.00 from holding Byline Bancorp or generate 39.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Business First Bancshares
Performance |
| Timeline |
| Byline Bancorp |
| Business First Bancshares |
Byline Bancorp and Business First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Business First
The main advantage of trading using opposite Byline Bancorp and Business First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Business First 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 Business First will offset losses from the drop in Business First's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Business First vs. First Community | Business First vs. Community West Bancshares | Business First vs. First Financial Northwest | Business First vs. First Northwest Bancorp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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