Correlation Between Byline Bancorp and Investar Holding
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Investar Holding 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 Investar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Investar Holding Corp, you can compare the effects of market volatilities on Byline Bancorp and Investar Holding 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 Investar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Investar Holding.
Diversification Opportunities for Byline Bancorp and Investar Holding
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Byline and Investar is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Investar Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investar Holding Corp 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 Investar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investar Holding Corp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Investar Holding go up and down completely randomly.
Pair Corralation between Byline Bancorp and Investar Holding
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.26 times less return on investment than Investar Holding. In addition to that, Byline Bancorp is 1.08 times more volatile than Investar Holding Corp. It trades about 0.13 of its total potential returns per unit of risk. Investar Holding Corp is currently generating about 0.18 per unit of volatility. If you would invest 1,554 in Investar Holding Corp on August 28, 2024 and sell it today you would earn a total of 882.00 from holding Investar Holding Corp or generate 56.76% 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. Investar Holding Corp
Performance |
| Timeline |
| Byline Bancorp |
| Investar Holding Corp |
Byline Bancorp and Investar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Investar Holding
The main advantage of trading using opposite Byline Bancorp and Investar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Investar Holding 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 Investar Holding will offset losses from the drop in Investar Holding's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Investar Holding vs. Magyar Bancorp | Investar Holding vs. Home Federal Bancorp | Investar Holding vs. Community West Bancshares | Investar Holding vs. First Northwest 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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