Correlation Between Byline Bancorp and Sierra Bancorp
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Sierra Bancorp 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 Sierra Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Sierra Bancorp, you can compare the effects of market volatilities on Byline Bancorp and Sierra Bancorp 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 Sierra Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Sierra Bancorp.
Diversification Opportunities for Byline Bancorp and Sierra Bancorp
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Byline and Sierra is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Sierra Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra 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 Sierra Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Sierra Bancorp go up and down completely randomly.
Pair Corralation between Byline Bancorp and Sierra Bancorp
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.23 times less return on investment than Sierra Bancorp. But when comparing it to its historical volatility, Byline Bancorp is 1.12 times less risky than Sierra Bancorp. It trades about 0.05 of its potential returns per unit of risk. Sierra Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,021 in Sierra Bancorp on August 27, 2024 and sell it today you would earn a total of 1,218 from holding Sierra Bancorp or generate 60.27% 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. Sierra Bancorp
Performance |
| Timeline |
| Byline Bancorp |
| Sierra Bancorp |
Byline Bancorp and Sierra Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Sierra Bancorp
The main advantage of trading using opposite Byline Bancorp and Sierra Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Sierra Bancorp 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 Sierra Bancorp will offset losses from the drop in Sierra Bancorp's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Sierra Bancorp vs. Home Federal Bancorp | Sierra Bancorp vs. First Financial Northwest | Sierra Bancorp vs. First Northwest Bancorp | Sierra Bancorp vs. First Capital |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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