Correlation Between Peapack Gladstone and Byline Bancorp

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

By analyzing existing cross correlation between Peapack Gladstone Financial and Byline Bancorp, you can compare the effects of market volatilities on Peapack Gladstone and Byline Bancorp 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 Peapack Gladstone with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peapack Gladstone and Byline Bancorp.

Diversification Opportunities for Peapack Gladstone and Byline Bancorp

0.91

Correlation Coefficient

Peapack Gladstone  Byline Bancorp

Almost no diversification

The 3 months correlation between Peapack and Byline is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Peapack Gladstone Financial and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Peapack Gladstone 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 Peapack Gladstone Financial are associated (or correlated) with Byline Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byline Bancorp has no effect on the direction of Peapack Gladstone i.e., Peapack Gladstone and Byline Bancorp go up and down completely randomly.

Pair Corralation between Peapack Gladstone and Byline Bancorp

Considering the 90-day investment horizon Peapack Gladstone Financial is expected to under-perform the Byline Bancorp. In addition to that, Peapack Gladstone is 1.4 times more volatile than Byline Bancorp. It trades about -0.07 of its total potential returns per unit of risk. Byline Bancorp is currently generating about -0.08 per unit of volatility. If you would invest  2,886  in Byline Bancorp on December 28, 2024 and sell it today you would lose (210.00) from holding Byline Bancorp or give up 7.28% of portfolio value over 90 days.

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

Peapack Gladstone Financial  vs.  Byline Bancorp

Peapack Gladstone

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peapack Gladstone Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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.

Pair Trading with Peapack Gladstone and Byline Bancorp

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

The idea behind Peapack Gladstone Financial and Byline 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 Commodity Directory module to find actively traded commodities issued by global exchanges.