Correlation Between Solvay Bank and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Solvay Bank 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 Solvay Bank and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solvay Bank Corp and Byline Bancorp, you can compare the effects of market volatilities on Solvay Bank 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 Solvay Bank with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solvay Bank and Byline Bancorp.
Diversification Opportunities for Solvay Bank and Byline Bancorp
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solvay and Byline is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Solvay Bank Corp and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Solvay Bank 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 Solvay Bank Corp 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 Solvay Bank i.e., Solvay Bank and Byline Bancorp go up and down completely randomly.
Pair Corralation between Solvay Bank and Byline Bancorp
Given the investment horizon of 90 days Solvay Bank Corp is expected to under-perform the Byline Bancorp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Solvay Bank Corp is 3.67 times less risky than Byline Bancorp. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Byline Bancorp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,682 in Byline Bancorp on September 1, 2024 and sell it today you would earn a total of 460.00 from holding Byline Bancorp or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Solvay Bank Corp vs. Byline Bancorp
Performance |
| Timeline |
| Solvay Bank Corp |
| Byline Bancorp |
Solvay Bank and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solvay Bank and Byline Bancorp
The main advantage of trading using opposite Solvay Bank and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solvay Bank 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.| Solvay Bank vs. Southern Michigan Bancorp | Solvay Bank vs. Summit Bancshares | Solvay Bank vs. Tri County Financial Group | Solvay Bank vs. QNB Corp |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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