Correlation Between Byline Bancorp and Simmons First
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Simmons First 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 Simmons First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Simmons First National, you can compare the effects of market volatilities on Byline Bancorp and Simmons First 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 Simmons First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Simmons First.
Diversification Opportunities for Byline Bancorp and Simmons First
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Simmons is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Simmons First National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simmons First National 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 Simmons First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simmons First National has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Simmons First go up and down completely randomly.
Pair Corralation between Byline Bancorp and Simmons First
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.54 times more return on investment than Simmons First. However, Byline Bancorp is 1.54 times more volatile than Simmons First National. It trades about 0.17 of its potential returns per unit of risk. Simmons First National is currently generating about 0.2 per unit of risk. If you would invest 2,607 in Byline Bancorp on August 28, 2024 and sell it today you would earn a total of 597.00 from holding Byline Bancorp or generate 22.9% 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. Simmons First National
Performance |
| Timeline |
| Byline Bancorp |
| Simmons First National |
Byline Bancorp and Simmons First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Simmons First
The main advantage of trading using opposite Byline Bancorp and Simmons First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Simmons First 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 Simmons First will offset losses from the drop in Simmons First's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Simmons First vs. Renasant | Simmons First vs. Sandy Spring Bancorp | Simmons First vs. Home BancShares | Simmons First vs. Southside 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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