Correlation Between Capitol Federal and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Capitol Federal and Byline Bancorp 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 Capitol Federal and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitol Federal Financial and Byline Bancorp, you can compare the effects of market volatilities on Capitol Federal and Byline Bancorp 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 Capitol Federal with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitol Federal and Byline Bancorp.
Diversification Opportunities for Capitol Federal and Byline Bancorp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capitol and Byline is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Federal Financial and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Capitol Federal 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 Capitol Federal Financial are associated (or correlated) with Byline Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byline Bancorp has no effect on the direction of Capitol Federal i.e., Capitol Federal and Byline Bancorp go up and down completely randomly.
Pair Corralation between Capitol Federal and Byline Bancorp
Given the investment horizon of 90 days Capitol Federal Financial is expected to under-perform the Byline Bancorp. In addition to that, Capitol Federal is 1.13 times more volatile than Byline Bancorp. It trades about -0.01 of its total potential returns per unit of risk. Byline Bancorp is currently generating about 0.03 per unit of volatility. If you would invest 2,456 in Byline Bancorp on November 2, 2024 and sell it today you would earn a total of 511.00 from holding Byline Bancorp or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitol Federal Financial vs. Byline Bancorp
Performance |
| Timeline |
| Capitol Federal Financial |
| Byline Bancorp |
Capitol Federal and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitol Federal and Byline Bancorp
The main advantage of trading using opposite Capitol Federal and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitol Federal position performs unexpectedly, Byline Bancorp 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 Byline Bancorp will offset losses from the drop in Byline Bancorp's long position.| Capitol Federal vs. Independent Bank | Capitol Federal vs. BankFinancial | Capitol Federal vs. Business First Bancshares | Capitol Federal vs. First Bancorp |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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