Correlation Between Byline Bancorp and Greene County

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

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

Diversification Opportunities for Byline Bancorp and Greene County

0.71

Correlation Coefficient

Byline Bancorp  Greene County

Poor diversification

The 3 months correlation between Byline and Greene is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Greene County Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greene County 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 Greene County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greene County Bancorp has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Greene County go up and down completely randomly.

Pair Corralation between Byline Bancorp and Greene County

Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.98 times more return on investment than Greene County. However, Byline Bancorp is 1.02 times less risky than Greene County. It trades about -0.08 of its potential returns per unit of risk. Greene County Bancorp is currently generating about -0.33 per unit of risk. If you would invest  2,916  in Byline Bancorp on October 22, 2024 and sell it today you would lose (65.00) from holding Byline Bancorp or give up 2.23% 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.  Greene County Bancorp

Byline Bancorp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Byline Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Byline Bancorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Greene County Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greene County Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Greene County is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Byline Bancorp and Greene County

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

The idea behind Byline Bancorp and Greene County Bancorp 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.