Correlation Between Byline Bancorp and Community West
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Community West 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 Community West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Community West Bancshares, you can compare the effects of market volatilities on Byline Bancorp and Community West 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 Community West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Community West.
Diversification Opportunities for Byline Bancorp and Community West
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Byline and Community is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Community West Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community West Bancshares 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 Community West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community West Bancshares has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Community West go up and down completely randomly.
Pair Corralation between Byline Bancorp and Community West
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.13 times more return on investment than Community West. However, Byline Bancorp is 1.13 times more volatile than Community West Bancshares. It trades about 0.14 of its potential returns per unit of risk. Community West Bancshares is currently generating about 0.06 per unit of risk. If you would invest 2,841 in Byline Bancorp on November 18, 2024 and sell it today you would earn a total of 109.00 from holding Byline Bancorp or generate 3.84% 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. Community West Bancshares
Performance |
| Timeline |
| Byline Bancorp |
| Community West Bancshares |
Byline Bancorp and Community West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Community West
The main advantage of trading using opposite Byline Bancorp and Community West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Community West 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 Community West will offset losses from the drop in Community West's long position.| Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. Lake Shore Bancorp | Byline Bancorp vs. Old Point Financial | Byline Bancorp vs. Parke Bancorp |
| Community West vs. Home Federal Bancorp | Community West vs. Magyar Bancorp | Community West vs. First Northwest Bancorp | Community West vs. First Financial Northwest |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |