Correlation Between Heartland Financial and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Heartland Financial 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 Heartland Financial and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and Byline Bancorp, you can compare the effects of market volatilities on Heartland Financial 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 Heartland Financial with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and Byline Bancorp.
Diversification Opportunities for Heartland Financial and Byline Bancorp
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Heartland and Byline is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Heartland Financial 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 Heartland Financial USA 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 Heartland Financial i.e., Heartland Financial and Byline Bancorp go up and down completely randomly.
Pair Corralation between Heartland Financial and Byline Bancorp
Given the investment horizon of 90 days Heartland Financial USA is expected to generate 1.2 times more return on investment than Byline Bancorp. However, Heartland Financial is 1.2 times more volatile than Byline Bancorp. It trades about 0.1 of its potential returns per unit of risk. Byline Bancorp is currently generating about 0.08 per unit of risk. If you would invest 3,067 in Heartland Financial USA on August 31, 2024 and sell it today you would earn a total of 3,690 from holding Heartland Financial USA or generate 120.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Financial USA vs. Byline Bancorp
Performance |
| Timeline |
| Heartland Financial USA |
| Byline Bancorp |
Heartland Financial and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Financial and Byline Bancorp
The main advantage of trading using opposite Heartland Financial and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial 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.| Heartland Financial vs. Heritage Commerce Corp | Heartland Financial vs. Business First Bancshares | Heartland Financial vs. German American Bancorp | Heartland Financial vs. Texas Capital Bancshares |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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