Correlation Between Byline Bancorp and Texas Capital
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Texas Capital 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 Texas Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Texas Capital Bancshares, you can compare the effects of market volatilities on Byline Bancorp and Texas Capital 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 Texas Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Texas Capital.
Diversification Opportunities for Byline Bancorp and Texas Capital
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Byline and Texas is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Texas Capital Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Capital Bancshares 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 Texas Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Capital Bancshares has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Texas Capital go up and down completely randomly.
Pair Corralation between Byline Bancorp and Texas Capital
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.79 times more return on investment than Texas Capital. However, Byline Bancorp is 1.27 times less risky than Texas Capital. It trades about -0.1 of its potential returns per unit of risk. Texas Capital Bancshares is currently generating about -0.09 per unit of risk. If you would invest 3,127 in Byline Bancorp on November 30, 2024 and sell it today you would lose (273.00) from holding Byline Bancorp or give up 8.73% 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. Texas Capital Bancshares
Performance |
Timeline |
Byline Bancorp |
Texas Capital Bancshares |
Byline Bancorp and Texas Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Byline Bancorp and Texas Capital
The main advantage of trading using opposite Byline Bancorp and Texas Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Texas Capital 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 Texas Capital will offset losses from the drop in Texas Capital's long position.Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
Texas Capital vs. Heritage Commerce Corp | Texas Capital vs. Business First Bancshares | Texas Capital vs. German American Bancorp | Texas Capital vs. Commerce 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |