Correlation Between Byline Bancorp and BankFinancial
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and BankFinancial 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 Byline Bancorp and BankFinancial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and BankFinancial, you can compare the effects of market volatilities on Byline Bancorp and BankFinancial 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 Byline Bancorp with a short position of BankFinancial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and BankFinancial.
Diversification Opportunities for Byline Bancorp and BankFinancial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and BankFinancial is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and BankFinancial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankFinancial and Byline 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 Byline Bancorp are associated (or correlated) with BankFinancial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankFinancial has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and BankFinancial go up and down completely randomly.
Pair Corralation between Byline Bancorp and BankFinancial
Allowing for the 90-day total investment horizon Byline Bancorp is expected to under-perform the BankFinancial. But the stock apears to be less risky and, when comparing its historical volatility, Byline Bancorp is 1.29 times less risky than BankFinancial. The stock trades about -0.1 of its potential returns per unit of risk. The BankFinancial is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,333 in BankFinancial on December 1, 2024 and sell it today you would lose (9.00) from holding BankFinancial or give up 0.68% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Byline Bancorp vs. BankFinancial
Performance |
Timeline |
Byline Bancorp |
BankFinancial |
Byline Bancorp and BankFinancial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Byline Bancorp and BankFinancial
The main advantage of trading using opposite Byline Bancorp and BankFinancial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, BankFinancial 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 BankFinancial will offset losses from the drop in BankFinancial's long position.Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
BankFinancial vs. First Business Financial | BankFinancial vs. Old Point Financial | BankFinancial vs. Parke Bancorp | BankFinancial vs. Community West Bancshares |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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