Correlation Between Byline Bancorp and Independent Bank
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Independent Bank 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 Independent Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Independent Bank, you can compare the effects of market volatilities on Byline Bancorp and Independent Bank 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 Independent Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Independent Bank.
Diversification Opportunities for Byline Bancorp and Independent Bank
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Byline and Independent is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Independent Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independent Bank 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 Independent Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independent Bank has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Independent Bank go up and down completely randomly.
Pair Corralation between Byline Bancorp and Independent Bank
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.45 times less return on investment than Independent Bank. But when comparing it to its historical volatility, Byline Bancorp is 1.09 times less risky than Independent Bank. It trades about 0.09 of its potential returns per unit of risk. Independent Bank is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,638 in Independent Bank on August 27, 2024 and sell it today you would earn a total of 2,212 from holding Independent Bank or generate 135.04% 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. Independent Bank
Performance |
| Timeline |
| Byline Bancorp |
| Independent Bank |
Byline Bancorp and Independent Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Independent Bank
The main advantage of trading using opposite Byline Bancorp and Independent Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Independent Bank 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 Independent Bank will offset losses from the drop in Independent Bank's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Independent Bank vs. First Northwest Bancorp | Independent Bank vs. Community West Bancshares | Independent Bank vs. First Financial Northwest | Independent Bank vs. Great Southern 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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