Correlation Between Byline Bancorp and Webster Financial
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Webster 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 Webster 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 Webster Financial, you can compare the effects of market volatilities on Byline Bancorp and Webster 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 Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Webster Financial.
Diversification Opportunities for Byline Bancorp and Webster Financial
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Byline and Webster is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster 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 Webster Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webster Financial has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Webster Financial go up and down completely randomly.
Pair Corralation between Byline Bancorp and Webster Financial
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.25 times more return on investment than Webster Financial. However, Byline Bancorp is 1.25 times more volatile than Webster Financial. It trades about 0.09 of its potential returns per unit of risk. Webster Financial is currently generating about 0.08 per unit of risk. If you would invest 1,640 in Byline Bancorp on August 26, 2024 and sell it today you would earn a total of 1,554 from holding Byline Bancorp or generate 94.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Webster Financial
Performance |
| Timeline |
| Byline Bancorp |
| Webster Financial |
Byline Bancorp and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Webster Financial
The main advantage of trading using opposite Byline Bancorp and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Webster 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 Webster Financial will offset losses from the drop in Webster Financial's long position.| Byline Bancorp vs. Fifth Third Bancorp | Byline Bancorp vs. Zions Bancorporation | Byline Bancorp vs. Huntington Bancshares Incorporated | Byline Bancorp vs. PNC Financial Services |
| Webster Financial vs. KeyCorp | Webster Financial vs. Associated Banc Corp | Webster Financial vs. New York Community | Webster Financial vs. Synovus Financial Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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