Correlation Between Byline Bancorp and Solvay Bank
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Solvay Bank 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 Solvay Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Solvay Bank Corp, you can compare the effects of market volatilities on Byline Bancorp and Solvay Bank 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 Solvay Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Solvay Bank.
Diversification Opportunities for Byline Bancorp and Solvay Bank
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Byline and Solvay is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Solvay Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solvay Bank Corp 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 Solvay Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solvay Bank Corp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Solvay Bank go up and down completely randomly.
Pair Corralation between Byline Bancorp and Solvay Bank
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.25 times less return on investment than Solvay Bank. But when comparing it to its historical volatility, Byline Bancorp is 2.41 times less risky than Solvay Bank. It trades about 0.05 of its potential returns per unit of risk. Solvay Bank Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,900 in Solvay Bank Corp on August 29, 2024 and sell it today you would lose (50.00) from holding Solvay Bank Corp or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.44% |
| Values | Daily Returns |
Byline Bancorp vs. Solvay Bank Corp
Performance |
| Timeline |
| Byline Bancorp |
| Solvay Bank Corp |
Byline Bancorp and Solvay Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Solvay Bank
The main advantage of trading using opposite Byline Bancorp and Solvay Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Solvay Bank 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 Solvay Bank will offset losses from the drop in Solvay Bank's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Solvay Bank vs. Invesco High Income | Solvay Bank vs. Blackrock Muniholdings Ny | Solvay Bank vs. Nuveen California Select | Solvay Bank vs. MFS Investment Grade |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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