Correlation Between Byline Bancorp and Ffbw

Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Ffbw 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 Ffbw into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Byline Bancorp and Ffbw Inc, you can compare the effects of market volatilities on Byline Bancorp and Ffbw 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 Ffbw. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Ffbw.

Diversification Opportunities for Byline Bancorp and Ffbw

0.52

Correlation Coefficient

Byline Bancorp  Ffbw

Very weak diversification

The 3 months correlation between Byline and Ffbw is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Ffbw Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ffbw Inc 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 Ffbw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ffbw Inc has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Ffbw go up and down completely randomly.

Pair Corralation between Byline Bancorp and Ffbw

If you would invest  1,990  in Byline Bancorp on October 1, 2024 and sell it today you would earn a total of  906.00  from holding Byline Bancorp or generate 45.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.35%
Values	Daily Returns

Byline Bancorp  vs.  Ffbw Inc

Byline Bancorp

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Byline Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Byline Bancorp showed solid returns over the last few months and may actually be approaching a breakup point.

Ffbw Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ffbw Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, Ffbw is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Byline Bancorp and Ffbw

The main advantage of trading using opposite Byline Bancorp and Ffbw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Ffbw 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 Ffbw will offset losses from the drop in Ffbw's long position.

The idea behind Byline Bancorp and Ffbw Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.