Correlation Between Byline Bancorp and Shore Bancshares
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Shore Bancshares 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 Shore Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Shore Bancshares, you can compare the effects of market volatilities on Byline Bancorp and Shore Bancshares 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 Shore Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Shore Bancshares.
Diversification Opportunities for Byline Bancorp and Shore Bancshares
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Byline and Shore is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Shore Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shore Bancshares 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 Shore Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shore Bancshares has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Shore Bancshares go up and down completely randomly.
Pair Corralation between Byline Bancorp and Shore Bancshares
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.99 times more return on investment than Shore Bancshares. However, Byline Bancorp is 1.01 times less risky than Shore Bancshares. It trades about 0.1 of its potential returns per unit of risk. Shore Bancshares is currently generating about 0.08 per unit of risk. If you would invest 2,151 in Byline Bancorp on August 28, 2024 and sell it today you would earn a total of 1,053 from holding Byline Bancorp or generate 48.95% 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. Shore Bancshares
Performance |
| Timeline |
| Byline Bancorp |
| Shore Bancshares |
Byline Bancorp and Shore Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Shore Bancshares
The main advantage of trading using opposite Byline Bancorp and Shore Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Shore Bancshares 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 Shore Bancshares will offset losses from the drop in Shore Bancshares' long position.| Byline Bancorp vs. Fifth Third Bancorp | Byline Bancorp vs. Zions Bancorporation | Byline Bancorp vs. Huntington Bancshares Incorporated | Byline Bancorp vs. Comerica |
| Shore Bancshares vs. Home Federal Bancorp | Shore Bancshares vs. IF Bancorp | Shore Bancshares vs. Western New England | Shore Bancshares vs. Colony Bankcorp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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