Correlation Between Byline Bancorp and Nu Holdings
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Nu Holdings 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 Nu Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Nu Holdings, you can compare the effects of market volatilities on Byline Bancorp and Nu Holdings 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 Nu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Nu Holdings.
Diversification Opportunities for Byline Bancorp and Nu Holdings
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Byline and Nu Holdings is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Nu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu Holdings 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 Nu Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nu Holdings has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Nu Holdings go up and down completely randomly.
Pair Corralation between Byline Bancorp and Nu Holdings
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.29 times less return on investment than Nu Holdings. But when comparing it to its historical volatility, Byline Bancorp is 1.29 times less risky than Nu Holdings. It trades about 0.07 of its potential returns per unit of risk. Nu Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 917.00 in Nu Holdings on November 9, 2024 and sell it today you would earn a total of 461.00 from holding Nu Holdings or generate 50.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Nu Holdings
Performance |
| Timeline |
| Byline Bancorp |
| Nu Holdings |
Byline Bancorp and Nu Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Nu Holdings
The main advantage of trading using opposite Byline Bancorp and Nu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Nu Holdings 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 Nu Holdings will offset losses from the drop in Nu Holdings' long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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