Correlation Between Byline Bancorp and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Fifth Third 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 Fifth Third into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Fifth Third Bancorp, you can compare the effects of market volatilities on Byline Bancorp and Fifth Third 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 Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Fifth Third.
Diversification Opportunities for Byline Bancorp and Fifth Third
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Byline and Fifth is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Fifth Third Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fifth Third 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 Fifth Third. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fifth Third Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Fifth Third go up and down completely randomly.
Pair Corralation between Byline Bancorp and Fifth Third
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 2.96 times more return on investment than Fifth Third. However, Byline Bancorp is 2.96 times more volatile than Fifth Third Bancorp. It trades about 0.11 of its potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.06 per unit of risk. If you would invest 1,975 in Byline Bancorp on August 24, 2024 and sell it today you would earn a total of 1,222 from holding Byline Bancorp or generate 61.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Fifth Third Bancorp
Performance |
| Timeline |
| Byline Bancorp |
| Fifth Third Bancorp |
Byline Bancorp and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Fifth Third
The main advantage of trading using opposite Byline Bancorp and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Fifth Third 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 Fifth Third will offset losses from the drop in Fifth Third's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Fifth Third vs. Fifth Third Bancorp | Fifth Third vs. Fifth Third Bancorp | Fifth Third vs. First Citizens BancShares | Fifth Third vs. Huntington Bancshares Incorporated |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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