Correlation Between Byline Bancorp and First Northwest
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and First Northwest 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 Northwest 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 Northwest Bancorp, you can compare the effects of market volatilities on Byline Bancorp and First Northwest 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 Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and First Northwest.
Diversification Opportunities for Byline Bancorp and First Northwest
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Byline and First is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and First Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Northwest Bancorp 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 Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Northwest Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and First Northwest go up and down completely randomly.
Pair Corralation between Byline Bancorp and First Northwest
Allowing for the 90-day total investment horizon Byline Bancorp is expected to under-perform the First Northwest. But the stock apears to be less risky and, when comparing its historical volatility, Byline Bancorp is 1.15 times less risky than First Northwest. The stock trades about -0.1 of its potential returns per unit of risk. The First Northwest Bancorp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,098 in First Northwest Bancorp on November 30, 2024 and sell it today you would lose (17.00) from holding First Northwest Bancorp or give up 1.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Byline Bancorp vs. First Northwest Bancorp
Performance |
Timeline |
Byline Bancorp |
First Northwest Bancorp |
Byline Bancorp and First Northwest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Byline Bancorp and First Northwest
The main advantage of trading using opposite Byline Bancorp and First Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, First Northwest 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 Northwest will offset losses from the drop in First Northwest's long position.Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
First Northwest vs. Home Federal Bancorp | First Northwest vs. First Financial Northwest | First Northwest vs. First Capital | First Northwest 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |