Correlation Between Byline Bancorp and Horizon Bancorp
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Horizon Bancorp 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 Horizon Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Horizon Bancorp, you can compare the effects of market volatilities on Byline Bancorp and Horizon Bancorp 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 Horizon Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Horizon Bancorp.
Diversification Opportunities for Byline Bancorp and Horizon Bancorp
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Byline and Horizon is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Horizon Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon 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 Horizon Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Horizon Bancorp go up and down completely randomly.
Pair Corralation between Byline Bancorp and Horizon Bancorp
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.77 times more return on investment than Horizon Bancorp. However, Byline Bancorp is 1.3 times less risky than Horizon Bancorp. It trades about 0.05 of its potential returns per unit of risk. Horizon Bancorp is currently generating about 0.04 per unit of risk. If you would invest 2,159 in Byline Bancorp on August 24, 2024 and sell it today you would earn a total of 1,035 from holding Byline Bancorp or generate 47.94% 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. Horizon Bancorp
Performance |
| Timeline |
| Byline Bancorp |
| Horizon Bancorp |
Byline Bancorp and Horizon Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Horizon Bancorp
The main advantage of trading using opposite Byline Bancorp and Horizon Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Horizon Bancorp 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 Horizon Bancorp will offset losses from the drop in Horizon Bancorp's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Horizon Bancorp vs. Community West Bancshares | Horizon Bancorp vs. Heritage Financial | Horizon Bancorp vs. First Financial Northwest | Horizon Bancorp vs. Sierra Bancorp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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