Correlation Between Provident Financial and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Provident 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 Provident 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 Provident Financial Services and Byline Bancorp, you can compare the effects of market volatilities on Provident 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 Provident Financial with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provident Financial and Byline Bancorp.
Diversification Opportunities for Provident Financial and Byline Bancorp
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Provident and Byline is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Provident Financial Services and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Provident 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 Provident Financial Services 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 Provident Financial i.e., Provident Financial and Byline Bancorp go up and down completely randomly.
Pair Corralation between Provident Financial and Byline Bancorp
Considering the 90-day investment horizon Provident Financial is expected to generate 19.23 times less return on investment than Byline Bancorp. In addition to that, Provident Financial is 1.31 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 0.12 per unit of volatility. If you would invest 2,842 in Byline Bancorp on November 3, 2024 and sell it today you would earn a total of 92.00 from holding Byline Bancorp or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Provident Financial Services vs. Byline Bancorp
Performance |
| Timeline |
| Provident Financial |
| Byline Bancorp |
Provident Financial and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provident Financial and Byline Bancorp
The main advantage of trading using opposite Provident Financial and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provident 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.| Provident Financial vs. First Mid Illinois | Provident Financial vs. ConnectOne Bancorp | Provident Financial vs. Finward Bancorp | Provident Financial vs. CrossFirst Bankshares |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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