Correlation Between Byline Bancorp and BankUnited
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and BankUnited 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 BankUnited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and BankUnited, you can compare the effects of market volatilities on Byline Bancorp and BankUnited 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 BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and BankUnited.
Diversification Opportunities for Byline Bancorp and BankUnited
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Byline and BankUnited is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited 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 BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and BankUnited go up and down completely randomly.
Pair Corralation between Byline Bancorp and BankUnited
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.2 times less return on investment than BankUnited. In addition to that, Byline Bancorp is 1.07 times more volatile than BankUnited. It trades about 0.18 of its total potential returns per unit of risk. BankUnited is currently generating about 0.23 per unit of volatility. If you would invest 3,551 in BankUnited on August 30, 2024 and sell it today you would earn a total of 685.00 from holding BankUnited or generate 19.29% 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. BankUnited
Performance |
| Timeline |
| Byline Bancorp |
| BankUnited |
Byline Bancorp and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and BankUnited
The main advantage of trading using opposite Byline Bancorp and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| BankUnited vs. SVB T Corp | BankUnited vs. First Capital | BankUnited vs. Pioneer Bankcorp | BankUnited vs. Liberty 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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