Correlation Between Byline Bancorp and Norwood Financial
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Norwood 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 Norwood 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 Norwood Financial Corp, you can compare the effects of market volatilities on Byline Bancorp and Norwood 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 Norwood Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Norwood Financial.
Diversification Opportunities for Byline Bancorp and Norwood Financial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Norwood is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Norwood Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norwood Financial Corp 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 Norwood Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norwood Financial Corp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Norwood Financial go up and down completely randomly.
Pair Corralation between Byline Bancorp and Norwood Financial
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.56 times more return on investment than Norwood Financial. However, Byline Bancorp is 1.56 times more volatile than Norwood Financial Corp. It trades about 0.23 of its potential returns per unit of risk. Norwood Financial Corp is currently generating about 0.17 per unit of risk. If you would invest 2,645 in Byline Bancorp on August 25, 2024 and sell it today you would earn a total of 549.00 from holding Byline Bancorp or generate 20.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Byline Bancorp vs. Norwood Financial Corp
Performance |
| Timeline |
| Byline Bancorp |
| Norwood Financial Corp |
Byline Bancorp and Norwood Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Norwood Financial
The main advantage of trading using opposite Byline Bancorp and Norwood Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Norwood 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 Norwood Financial will offset losses from the drop in Norwood Financial'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 |
| Norwood Financial vs. Chemung Financial Corp | Norwood Financial vs. Home Federal Bancorp | Norwood Financial vs. Rhinebeck Bancorp | Norwood Financial vs. Finward Bancorp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |