Correlation Between Byline Bancorp and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and CF Bankshares 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 CF Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and CF Bankshares, you can compare the effects of market volatilities on Byline Bancorp and CF Bankshares 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 CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and CF Bankshares.
Diversification Opportunities for Byline Bancorp and CF Bankshares
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and CFBK is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Bankshares 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 CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and CF Bankshares go up and down completely randomly.
Pair Corralation between Byline Bancorp and CF Bankshares
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.48 times more return on investment than CF Bankshares. However, Byline Bancorp is 1.48 times more volatile than CF Bankshares. It trades about 0.2 of its potential returns per unit of risk. CF Bankshares is currently generating about 0.2 per unit of risk. If you would invest 2,664 in Byline Bancorp on August 24, 2024 and sell it today you would earn a total of 469.00 from holding Byline Bancorp or generate 17.61% 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. CF Bankshares
Performance |
| Timeline |
| Byline Bancorp |
| CF Bankshares |
Byline Bancorp and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and CF Bankshares
The main advantage of trading using opposite Byline Bancorp and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, CF Bankshares 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 CF Bankshares will offset losses from the drop in CF Bankshares' long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| CF Bankshares vs. Banco Bradesco SA | CF Bankshares vs. Itau Unibanco Banco | CF Bankshares vs. Banco Santander Brasil | CF Bankshares vs. Western Alliance Bancorporation |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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