Correlation Between Byline Bancorp and Washington Federal
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Washington Federal 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 Washington Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Washington Federal, you can compare the effects of market volatilities on Byline Bancorp and Washington Federal 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 Washington Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Washington Federal.
Diversification Opportunities for Byline Bancorp and Washington Federal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Washington is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Washington Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Federal 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 Washington Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Federal has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Washington Federal go up and down completely randomly.
Pair Corralation between Byline Bancorp and Washington Federal
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.94 times more return on investment than Washington Federal. However, Byline Bancorp is 1.06 times less risky than Washington Federal. It trades about 0.05 of its potential returns per unit of risk. Washington Federal is currently generating about 0.03 per unit of risk. If you would invest 2,208 in Byline Bancorp on August 30, 2024 and sell it today you would earn a total of 944.00 from holding Byline Bancorp or generate 42.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Washington Federal
Performance |
| Timeline |
| Byline Bancorp |
| Washington Federal |
Byline Bancorp and Washington Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Washington Federal
The main advantage of trading using opposite Byline Bancorp and Washington Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Washington Federal 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 Washington Federal will offset losses from the drop in Washington Federal's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
| Washington Federal vs. Finward Bancorp | Washington Federal vs. Great Southern Bancorp | Washington Federal vs. First Mid Illinois | Washington Federal vs. Franklin Financial Services |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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