Correlation Between Northfield Bancorp and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Northfield Bancorp 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 Northfield Bancorp and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northfield Bancorp and Byline Bancorp, you can compare the effects of market volatilities on Northfield Bancorp 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 Northfield Bancorp with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northfield Bancorp and Byline Bancorp.
Diversification Opportunities for Northfield Bancorp and Byline Bancorp
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Northfield and Byline is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Northfield Bancorp and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Northfield 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 Northfield Bancorp 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 Northfield Bancorp i.e., Northfield Bancorp and Byline Bancorp go up and down completely randomly.
Pair Corralation between Northfield Bancorp and Byline Bancorp
Given the investment horizon of 90 days Northfield Bancorp is expected to generate 1.27 times more return on investment than Byline Bancorp. However, Northfield Bancorp is 1.27 times more volatile than Byline Bancorp. It trades about 0.15 of its potential returns per unit of risk. Byline Bancorp is currently generating about 0.13 per unit of risk. If you would invest 850.00 in Northfield Bancorp on August 28, 2024 and sell it today you would earn a total of 537.00 from holding Northfield Bancorp or generate 63.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northfield Bancorp vs. Byline Bancorp
Performance |
| Timeline |
| Northfield Bancorp |
| Byline Bancorp |
Northfield Bancorp and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northfield Bancorp and Byline Bancorp
The main advantage of trading using opposite Northfield Bancorp and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northfield Bancorp 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.| Northfield Bancorp vs. Finward Bancorp | Northfield Bancorp vs. Community West Bancshares | Northfield Bancorp vs. First Financial Northwest | Northfield Bancorp vs. Home Bancorp |
| Byline Bancorp vs. Fifth Third Bancorp | Byline Bancorp vs. Huntington Bancshares Incorporated | Byline Bancorp vs. MT Bank |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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