Correlation Between Byline Bancorp and SHF Holdings
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and SHF Holdings 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 SHF Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and SHF Holdings, you can compare the effects of market volatilities on Byline Bancorp and SHF Holdings 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 SHF Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and SHF Holdings.
Diversification Opportunities for Byline Bancorp and SHF Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Byline and SHF is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and SHF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHF Holdings 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 SHF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHF Holdings has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and SHF Holdings go up and down completely randomly.
Pair Corralation between Byline Bancorp and SHF Holdings
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.2 times less return on investment than SHF Holdings. But when comparing it to its historical volatility, Byline Bancorp is 1.89 times less risky than SHF Holdings. It trades about 0.21 of its potential returns per unit of risk. SHF Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 39.00 in SHF Holdings on September 1, 2024 and sell it today you would earn a total of 7.00 from holding SHF Holdings or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Byline Bancorp vs. SHF Holdings
Performance |
| Timeline |
| Byline Bancorp |
| SHF Holdings |
Byline Bancorp and SHF Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and SHF Holdings
The main advantage of trading using opposite Byline Bancorp and SHF Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, SHF Holdings 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 SHF Holdings will offset losses from the drop in SHF Holdings' long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| SHF Holdings vs. Finward Bancorp | SHF Holdings vs. Northfield Bancorp | SHF Holdings vs. Community West Bancshares | SHF Holdings vs. First Community |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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