Correlation Between Byline Bancorp and Sterling Bancorp
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Sterling 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 Sterling 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 Sterling Bancorp, you can compare the effects of market volatilities on Byline Bancorp and Sterling 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 Sterling Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Sterling Bancorp.
Diversification Opportunities for Byline Bancorp and Sterling Bancorp
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Byline and Sterling is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Sterling Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling 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 Sterling Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Sterling Bancorp go up and down completely randomly.
Pair Corralation between Byline Bancorp and Sterling Bancorp
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.39 times more return on investment than Sterling Bancorp. However, Byline Bancorp is 1.39 times more volatile than Sterling Bancorp. It trades about 0.29 of its potential returns per unit of risk. Sterling Bancorp is currently generating about 0.05 per unit of risk. If you would invest 2,776 in Byline Bancorp on November 9, 2024 and sell it today you would earn a total of 246.00 from holding Byline Bancorp or generate 8.86% 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. Sterling Bancorp
Performance |
| Timeline |
| Byline Bancorp |
| Sterling Bancorp |
Byline Bancorp and Sterling Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Sterling Bancorp
The main advantage of trading using opposite Byline Bancorp and Sterling Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Sterling 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 Sterling Bancorp will offset losses from the drop in Sterling Bancorp's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Sterling Bancorp vs. Home Federal Bancorp | Sterling Bancorp vs. Lake Shore Bancorp | Sterling Bancorp vs. Magyar Bancorp | Sterling Bancorp vs. Franklin Financial Services |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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