Correlation Between Byline Bancorp and Bank of Marin
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Bank of Marin 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 Bank of Marin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Bank of Marin, you can compare the effects of market volatilities on Byline Bancorp and Bank of Marin 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 Bank of Marin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Bank of Marin.
Diversification Opportunities for Byline Bancorp and Bank of Marin
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Byline and Bank is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Bank of Marin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Marin 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 Bank of Marin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Marin has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Bank of Marin go up and down completely randomly.
Pair Corralation between Byline Bancorp and Bank of Marin
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.42 times less return on investment than Bank of Marin. But when comparing it to its historical volatility, Byline Bancorp is 1.01 times less risky than Bank of Marin. It trades about 0.17 of its potential returns per unit of risk. Bank of Marin is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,950 in Bank of Marin on August 28, 2024 and sell it today you would earn a total of 683.00 from holding Bank of Marin or generate 35.03% 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. Bank of Marin
Performance |
| Timeline |
| Byline Bancorp |
| Bank of Marin |
Byline Bancorp and Bank of Marin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Bank of Marin
The main advantage of trading using opposite Byline Bancorp and Bank of Marin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Bank of Marin 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 Bank of Marin will offset losses from the drop in Bank of Marin's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Bank of Marin vs. Fifth Third Bancorp | Bank of Marin vs. Zions Bancorporation | Bank of Marin vs. Huntington Bancshares Incorporated | Bank of Marin vs. Comerica |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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