Correlation Between Byline Bancorp and Blue Foundry
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Blue Foundry 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 Blue Foundry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Blue Foundry Bancorp, you can compare the effects of market volatilities on Byline Bancorp and Blue Foundry 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 Blue Foundry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Blue Foundry.
Diversification Opportunities for Byline Bancorp and Blue Foundry
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Blue is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Blue Foundry Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Foundry Bancorp 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 Blue Foundry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Foundry Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Blue Foundry go up and down completely randomly.
Pair Corralation between Byline Bancorp and Blue Foundry
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.98 times more return on investment than Blue Foundry. However, Byline Bancorp is 1.98 times more volatile than Blue Foundry Bancorp. It trades about 0.19 of its potential returns per unit of risk. Blue Foundry Bancorp is currently generating about 0.28 per unit of risk. If you would invest 2,775 in Byline Bancorp on August 28, 2024 and sell it today you would earn a total of 429.00 from holding Byline Bancorp or generate 15.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Blue Foundry Bancorp
Performance |
| Timeline |
| Byline Bancorp |
| Blue Foundry Bancorp |
Byline Bancorp and Blue Foundry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Blue Foundry
The main advantage of trading using opposite Byline Bancorp and Blue Foundry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Blue Foundry 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 Blue Foundry will offset losses from the drop in Blue Foundry's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Blue Foundry vs. Home Federal Bancorp | Blue Foundry vs. Lake Shore Bancorp | Blue Foundry vs. Community West Bancshares | Blue Foundry vs. Bogota Financial Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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