Correlation Between Byline Bancorp and Farmers National
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Farmers National 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 Farmers National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Farmers National Banc, you can compare the effects of market volatilities on Byline Bancorp and Farmers National 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 Farmers National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Farmers National.
Diversification Opportunities for Byline Bancorp and Farmers National
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Farmers is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Farmers National Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers National Banc 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 Farmers National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers National Banc has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Farmers National go up and down completely randomly.
Pair Corralation between Byline Bancorp and Farmers National
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.94 times more return on investment than Farmers National. However, Byline Bancorp is 1.06 times less risky than Farmers National. It trades about 0.09 of its potential returns per unit of risk. Farmers National Banc is currently generating about 0.06 per unit of risk. If you would invest 2,114 in Byline Bancorp on August 29, 2024 and sell it today you would earn a total of 1,063 from holding Byline Bancorp or generate 50.28% 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. Farmers National Banc
Performance |
| Timeline |
| Byline Bancorp |
| Farmers National Banc |
Byline Bancorp and Farmers National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Farmers National
The main advantage of trading using opposite Byline Bancorp and Farmers National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Farmers National 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 Farmers National will offset losses from the drop in Farmers National's long position.| Byline Bancorp vs. Fifth Third Bancorp | Byline Bancorp vs. Huntington Bancshares Incorporated | Byline Bancorp vs. MT Bank |
| Farmers National vs. Fifth Third Bancorp | Farmers National vs. Huntington Bancshares Incorporated | Farmers National vs. MT Bank |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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