Correlation Between Byline Bancorp and Financial Institutions
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Financial Institutions 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 Financial Institutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Financial Institutions, you can compare the effects of market volatilities on Byline Bancorp and Financial Institutions 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 Financial Institutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Financial Institutions.
Diversification Opportunities for Byline Bancorp and Financial Institutions
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Financial is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Financial Institutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Institutions 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 Financial Institutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Institutions has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Financial Institutions go up and down completely randomly.
Pair Corralation between Byline Bancorp and Financial Institutions
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.11 times more return on investment than Financial Institutions. However, Byline Bancorp is 1.11 times more volatile than Financial Institutions. It trades about 0.2 of its potential returns per unit of risk. Financial Institutions is currently generating about 0.1 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. Financial Institutions
Performance |
| Timeline |
| Byline Bancorp |
| Financial Institutions |
Byline Bancorp and Financial Institutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Financial Institutions
The main advantage of trading using opposite Byline Bancorp and Financial Institutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Financial Institutions 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 Financial Institutions will offset losses from the drop in Financial Institutions' long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Financial Institutions vs. Banco Bradesco SA | Financial Institutions vs. Itau Unibanco Banco | Financial Institutions vs. Banco Santander Brasil | Financial Institutions 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |