Correlation Between Byline Bancorp and First Of
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and First Of 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 First Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and First of Long, you can compare the effects of market volatilities on Byline Bancorp and First Of 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 First Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and First Of.
Diversification Opportunities for Byline Bancorp and First Of
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Byline and First is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and First of Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First of Long 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 First Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First of Long has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and First Of go up and down completely randomly.
Pair Corralation between Byline Bancorp and First Of
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.14 times more return on investment than First Of. However, Byline Bancorp is 1.14 times more volatile than First of Long. It trades about 0.16 of its potential returns per unit of risk. First of Long is currently generating about 0.18 per unit of risk. If you would invest 2,757 in Byline Bancorp on August 31, 2024 and sell it today you would earn a total of 385.00 from holding Byline Bancorp or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. First of Long
Performance |
| Timeline |
| Byline Bancorp |
| First of Long |
Byline Bancorp and First Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and First Of
The main advantage of trading using opposite Byline Bancorp and First Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, First Of 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 First Of will offset losses from the drop in First Of's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| First Of vs. Great Southern Bancorp | First Of vs. Enterprise Bancorp | First Of vs. Home Bancorp | First Of vs. Community West Bancshares |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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