Correlation Between Byline Bancorp and Investcorp Europe
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Investcorp Europe 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 Investcorp Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Investcorp Europe Acquisition, you can compare the effects of market volatilities on Byline Bancorp and Investcorp Europe 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 Investcorp Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Investcorp Europe.
Diversification Opportunities for Byline Bancorp and Investcorp Europe
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Byline and Investcorp is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Investcorp Europe Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Europe 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 Investcorp Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Europe has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Investcorp Europe go up and down completely randomly.
Pair Corralation between Byline Bancorp and Investcorp Europe
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 170.23 times less return on investment than Investcorp Europe. But when comparing it to its historical volatility, Byline Bancorp is 61.71 times less risky than Investcorp Europe. It trades about 0.05 of its potential returns per unit of risk. Investcorp Europe Acquisition is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Investcorp Europe Acquisition on August 29, 2024 and sell it today you would lose (3.72) from holding Investcorp Europe Acquisition or give up 74.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.42% |
| Values | Daily Returns |
Byline Bancorp vs. Investcorp Europe Acquisition
Performance |
| Timeline |
| Byline Bancorp |
| Investcorp Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Byline Bancorp and Investcorp Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Investcorp Europe
The main advantage of trading using opposite Byline Bancorp and Investcorp Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Investcorp Europe 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 Investcorp Europe will offset losses from the drop in Investcorp Europe's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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