Correlation Between Byline Bancorp and Nuveen New

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

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

Diversification Opportunities for Byline Bancorp and Nuveen New

-0.22

Correlation Coefficient

Byline Bancorp  Nuveen New

Very good diversification

The 3 months correlation between Byline and Nuveen is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Nuveen New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New York 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 Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New York has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Nuveen New go up and down completely randomly.

Pair Corralation between Byline Bancorp and Nuveen New

Allowing for the 90-day total investment horizon Byline Bancorp is expected to under-perform the Nuveen New. In addition to that, Byline Bancorp is 3.88 times more volatile than Nuveen New York. It trades about -0.08 of its total potential returns per unit of risk. Nuveen New York is currently generating about 0.25 per unit of volatility. If you would invest  1,117  in Nuveen New York on December 28, 2024 and sell it today you would earn a total of  61.00  from holding Nuveen New York or generate 5.46% return on investment over 90 days.

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

Byline Bancorp  vs.  Nuveen New York

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.

Nuveen New York

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen New York are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Nuveen New is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Byline Bancorp and Nuveen New

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

The idea behind Byline Bancorp and Nuveen New York 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.