Correlation Between Byline Bancorp and South Plains
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and South Plains 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 South Plains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and South Plains Financial, you can compare the effects of market volatilities on Byline Bancorp and South Plains 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 South Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and South Plains.
Diversification Opportunities for Byline Bancorp and South Plains
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Byline and South is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and South Plains Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Plains Financial 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 South Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Plains Financial has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and South Plains go up and down completely randomly.
Pair Corralation between Byline Bancorp and South Plains
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.0 times more return on investment than South Plains. However, Byline Bancorp is 1.0 times more volatile than South Plains Financial. It trades about 0.18 of its potential returns per unit of risk. South Plains Financial is currently generating about 0.16 per unit of risk. If you would invest 2,733 in Byline Bancorp on August 30, 2024 and sell it today you would earn a total of 419.00 from holding Byline Bancorp or generate 15.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. South Plains Financial
Performance |
| Timeline |
| Byline Bancorp |
| South Plains Financial |
Byline Bancorp and South Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and South Plains
The main advantage of trading using opposite Byline Bancorp and South Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, South Plains 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 South Plains will offset losses from the drop in South Plains' long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| South Plains vs. Sound Financial Bancorp | South Plains vs. Finward Bancorp | South Plains vs. Franklin Financial Services | South Plains vs. Community West 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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