Correlation Between Byline Bancorp and TFS Financial
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and TFS Financial 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 TFS Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and TFS Financial, you can compare the effects of market volatilities on Byline Bancorp and TFS Financial 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 TFS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and TFS Financial.
Diversification Opportunities for Byline Bancorp and TFS Financial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Byline and TFS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and TFS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS 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 TFS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS Financial has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and TFS Financial go up and down completely randomly.
Pair Corralation between Byline Bancorp and TFS Financial
Allowing for the 90-day total investment horizon Byline Bancorp is expected to under-perform the TFS Financial. But the stock apears to be less risky and, when comparing its historical volatility, Byline Bancorp is 1.57 times less risky than TFS Financial. The stock trades about -0.02 of its potential returns per unit of risk. The TFS Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,300 in TFS Financial on November 27, 2024 and sell it today you would earn a total of 32.00 from holding TFS Financial or generate 2.46% 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. TFS Financial
Performance |
| Timeline |
| Byline Bancorp |
| TFS Financial |
Byline Bancorp and TFS Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and TFS Financial
The main advantage of trading using opposite Byline Bancorp and TFS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, TFS Financial 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 TFS Financial will offset losses from the drop in TFS Financial's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| TFS Financial vs. First Hawaiian | TFS Financial vs. Territorial Bancorp | TFS Financial vs. Bank of Hawaii | TFS Financial vs. Financial Institutions |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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