Correlation Between Dime Community and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Dime Community 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 Dime Community and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dime Community Bancshares and Byline Bancorp, you can compare the effects of market volatilities on Dime Community 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 Dime Community with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dime Community and Byline Bancorp.
Diversification Opportunities for Dime Community and Byline Bancorp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dime and Byline is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dime Community Bancshares and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Dime Community 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 Dime Community Bancshares 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 Dime Community i.e., Dime Community and Byline Bancorp go up and down completely randomly.
Pair Corralation between Dime Community and Byline Bancorp
Assuming the 90 days horizon Dime Community Bancshares is expected to under-perform the Byline Bancorp. But the preferred stock apears to be less risky and, when comparing its historical volatility, Dime Community Bancshares is 3.89 times less risky than Byline Bancorp. The preferred stock trades about -0.1 of its potential returns per unit of risk. The Byline Bancorp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,664 in Byline Bancorp on August 24, 2024 and sell it today you would earn a total of 530.00 from holding Byline Bancorp or generate 19.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dime Community Bancshares vs. Byline Bancorp
Performance |
| Timeline |
| Dime Community Bancshares |
| Byline Bancorp |
Dime Community and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dime Community and Byline Bancorp
The main advantage of trading using opposite Dime Community and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dime Community 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.| Dime Community vs. First Citizens BancShares | Dime Community vs. Fifth Third Bancorp | Dime Community vs. OceanFirst Financial Corp | Dime Community vs. Fifth Third 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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