Correlation Between Byline Bancorp and KB Financial
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and KB Financial 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 KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and KB Financial Group, you can compare the effects of market volatilities on Byline Bancorp and KB Financial 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 KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and KB Financial.
Diversification Opportunities for Byline Bancorp and KB Financial
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Byline and KB Financial is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group 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 KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and KB Financial go up and down completely randomly.
Pair Corralation between Byline Bancorp and KB Financial
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 4.42 times less return on investment than KB Financial. In addition to that, Byline Bancorp is 1.14 times more volatile than KB Financial Group. It trades about 0.07 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.35 per unit of volatility. If you would invest 5,690 in KB Financial Group on November 1, 2024 and sell it today you would earn a total of 540.00 from holding KB Financial Group or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. KB Financial Group
Performance |
| Timeline |
| Byline Bancorp |
| KB Financial Group |
Byline Bancorp and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and KB Financial
The main advantage of trading using opposite Byline Bancorp and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, KB Financial 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 KB Financial will offset losses from the drop in KB Financial's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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