Correlation Between Byline Bancorp and TLGY Acquisition
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and TLGY Acquisition 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 TLGY Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and TLGY Acquisition Corp, you can compare the effects of market volatilities on Byline Bancorp and TLGY Acquisition 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 TLGY Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and TLGY Acquisition.
Diversification Opportunities for Byline Bancorp and TLGY Acquisition
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and TLGY is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and TLGY Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TLGY Acquisition 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 TLGY Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TLGY Acquisition Corp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and TLGY Acquisition go up and down completely randomly.
Pair Corralation between Byline Bancorp and TLGY Acquisition
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 23.84 times more return on investment than TLGY Acquisition. However, Byline Bancorp is 23.84 times more volatile than TLGY Acquisition Corp. It trades about 0.12 of its potential returns per unit of risk. TLGY Acquisition Corp is currently generating about 0.18 per unit of risk. If you would invest 2,269 in Byline Bancorp on September 1, 2024 and sell it today you would earn a total of 873.00 from holding Byline Bancorp or generate 38.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Byline Bancorp vs. TLGY Acquisition Corp
Performance |
| Timeline |
| Byline Bancorp |
| TLGY Acquisition Corp |
Byline Bancorp and TLGY Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and TLGY Acquisition
The main advantage of trading using opposite Byline Bancorp and TLGY Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, TLGY Acquisition 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 TLGY Acquisition will offset losses from the drop in TLGY Acquisition's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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