Correlation Between LINKBANCORP and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both LINKBANCORP 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 LINKBANCORP and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LINKBANCORP and Byline Bancorp, you can compare the effects of market volatilities on LINKBANCORP 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 LINKBANCORP with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LINKBANCORP and Byline Bancorp.
Diversification Opportunities for LINKBANCORP and Byline Bancorp
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LINKBANCORP and Byline is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and LINKBANCORP 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 LINKBANCORP 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 LINKBANCORP i.e., LINKBANCORP and Byline Bancorp go up and down completely randomly.
Pair Corralation between LINKBANCORP and Byline Bancorp
Given the investment horizon of 90 days LINKBANCORP is expected to generate 41.91 times less return on investment than Byline Bancorp. In addition to that, LINKBANCORP is 1.17 times more volatile than Byline Bancorp. It trades about 0.0 of its total potential returns per unit of risk. Byline Bancorp is currently generating about 0.05 per unit of volatility. If you would invest 2,195 in Byline Bancorp on August 23, 2024 and sell it today you would earn a total of 938.00 from holding Byline Bancorp or generate 42.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LINKBANCORP vs. Byline Bancorp
Performance |
| Timeline |
| LINKBANCORP |
| Byline Bancorp |
LINKBANCORP and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LINKBANCORP and Byline Bancorp
The main advantage of trading using opposite LINKBANCORP and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LINKBANCORP 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.| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP vs. Magyar 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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