Correlation Between Byline Bancorp and First Of

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

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

Diversification Opportunities for Byline Bancorp and First Of

0.59

Correlation Coefficient

Byline Bancorp  First Of

Very weak diversification

The 3 months correlation between Byline and First is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and First of Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First of Long 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 First Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First of Long has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and First Of go up and down completely randomly.

Pair Corralation between Byline Bancorp and First Of

Allowing for the 90-day total investment horizon Byline Bancorp is expected to under-perform the First Of. But the stock apears to be less risky and, when comparing its historical volatility, Byline Bancorp is 1.41 times less risky than First Of. The stock trades about -0.08 of its potential returns per unit of risk. The First of Long is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,146  in First of Long on December 27, 2024 and sell it today you would earn a total of  103.00  from holding First of Long or generate 8.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Byline Bancorp  vs.  First of Long

Byline Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Byline Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

First of Long

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in First of Long are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, First Of may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Byline Bancorp and First Of

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

The idea behind Byline Bancorp and First of Long 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.