Correlation Between Byline Bancorp and Orange County
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Orange County 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 Orange County into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Orange County Bancorp, you can compare the effects of market volatilities on Byline Bancorp and Orange County 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 Orange County. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Orange County.
Diversification Opportunities for Byline Bancorp and Orange County
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Orange is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Orange County Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange County 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 Orange County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange County Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Orange County go up and down completely randomly.
Pair Corralation between Byline Bancorp and Orange County
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.0 times more return on investment than Orange County. However, Byline Bancorp is 1.0 times more volatile than Orange County Bancorp. It trades about 0.23 of its potential returns per unit of risk. Orange County Bancorp is currently generating about 0.08 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 | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Orange County Bancorp
Performance |
| Timeline |
| Byline Bancorp |
| Orange County Bancorp |
Byline Bancorp and Orange County Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Orange County
The main advantage of trading using opposite Byline Bancorp and Orange County positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Orange County 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 Orange County will offset losses from the drop in Orange County's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Orange County vs. Southern States Bancshares | Orange County vs. US Century Bank | Orange County vs. Third Coast Bancshares | Orange County vs. Esquire Financial Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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