Correlation Between Byline Bancorp and NBT Bancorp
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and NBT 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 NBT 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 NBT Bancorp, you can compare the effects of market volatilities on Byline Bancorp and NBT 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 NBT Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and NBT Bancorp.
Diversification Opportunities for Byline Bancorp and NBT Bancorp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Byline and NBT is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and NBT Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBT 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 NBT Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBT Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and NBT Bancorp go up and down completely randomly.
Pair Corralation between Byline Bancorp and NBT Bancorp
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.99 times more return on investment than NBT Bancorp. However, Byline Bancorp is 1.01 times less risky than NBT Bancorp. It trades about 0.1 of its potential returns per unit of risk. NBT Bancorp is currently generating about 0.1 per unit of risk. If you would invest 2,151 in Byline Bancorp on August 28, 2024 and sell it today you would earn a total of 1,053 from holding Byline Bancorp or generate 48.95% 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. NBT Bancorp
Performance |
| Timeline |
| Byline Bancorp |
| NBT Bancorp |
Byline Bancorp and NBT Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and NBT Bancorp
The main advantage of trading using opposite Byline Bancorp and NBT Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, NBT 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 NBT Bancorp will offset losses from the drop in NBT Bancorp's long position.| Byline Bancorp vs. Fifth Third Bancorp | Byline Bancorp vs. Zions Bancorporation | Byline Bancorp vs. Huntington Bancshares Incorporated | Byline Bancorp vs. Comerica |
| NBT Bancorp vs. Oak Valley Bancorp | NBT Bancorp vs. Home Federal Bancorp | NBT Bancorp vs. Finward Bancorp | NBT Bancorp vs. Community West Bancshares |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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