Correlation Between Byline Bancorp and Peoples Fin
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Peoples Fin 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 Peoples Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Peoples Fin, you can compare the effects of market volatilities on Byline Bancorp and Peoples Fin 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 Peoples Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Peoples Fin.
Diversification Opportunities for Byline Bancorp and Peoples Fin
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Peoples is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Peoples Fin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Fin 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 Peoples Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Fin has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Peoples Fin go up and down completely randomly.
Pair Corralation between Byline Bancorp and Peoples Fin
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.92 times more return on investment than Peoples Fin. However, Byline Bancorp is 1.08 times less risky than Peoples Fin. It trades about 0.11 of its potential returns per unit of risk. Peoples Fin is currently generating about 0.09 per unit of risk. If you would invest 2,847 in Byline Bancorp on November 4, 2024 and sell it today you would earn a total of 87.00 from holding Byline Bancorp or generate 3.06% 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. Peoples Fin
Performance |
| Timeline |
| Byline Bancorp |
| Peoples Fin |
Byline Bancorp and Peoples Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Peoples Fin
The main advantage of trading using opposite Byline Bancorp and Peoples Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Peoples Fin 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 Peoples Fin will offset losses from the drop in Peoples Fin's long position.| Byline Bancorp vs. US Bancorp | Byline Bancorp vs. Truist Financial Corp | Byline Bancorp vs. Fifth Third Bancorp | Byline Bancorp vs. KeyCorp |
| Peoples Fin vs. Home Federal Bancorp | Peoples Fin vs. Magyar Bancorp | Peoples Fin vs. Finward Bancorp | Peoples Fin 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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