Correlation Between Byline Bancorp and Northeast Bancorp
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Northeast 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 Northeast 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 Northeast Bancorp, you can compare the effects of market volatilities on Byline Bancorp and Northeast 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 Northeast Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Northeast Bancorp.
Diversification Opportunities for Byline Bancorp and Northeast Bancorp
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Northeast is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Northeast Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northeast 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 Northeast Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northeast Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Northeast Bancorp go up and down completely randomly.
Pair Corralation between Byline Bancorp and Northeast Bancorp
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.63 times less return on investment than Northeast Bancorp. In addition to that, Byline Bancorp is 1.01 times more volatile than Northeast Bancorp. It trades about 0.12 of its total potential returns per unit of risk. Northeast Bancorp is currently generating about 0.2 per unit of volatility. If you would invest 5,814 in Northeast Bancorp on August 25, 2024 and sell it today you would earn a total of 4,326 from holding Northeast Bancorp or generate 74.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Northeast Bancorp
Performance |
| Timeline |
| Byline Bancorp |
| Northeast Bancorp |
Byline Bancorp and Northeast Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Northeast Bancorp
The main advantage of trading using opposite Byline Bancorp and Northeast Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Northeast 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 Northeast Bancorp will offset losses from the drop in Northeast Bancorp's long position.| Byline Bancorp vs. Fifth Third Bancorp | Byline Bancorp vs. Zions Bancorporation | Byline Bancorp vs. Huntington Bancshares Incorporated | Byline Bancorp vs. PNC Financial Services |
| Northeast Bancorp vs. Fifth Third Bancorp | Northeast Bancorp vs. Zions Bancorporation | Northeast Bancorp vs. Huntington Bancshares Incorporated | Northeast Bancorp vs. PNC Financial Services |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |