Correlation Between Byline Bancorp and JPMorgan Chase

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Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and JPMorgan Chase 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 JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and JPMorgan Chase Co, you can compare the effects of market volatilities on Byline Bancorp and JPMorgan Chase 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 JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and JPMorgan Chase.

Diversification Opportunities for Byline Bancorp and JPMorgan Chase

-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Byline and JPMorgan is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase 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 JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Byline Bancorp and JPMorgan Chase

Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 2.45 times less return on investment than JPMorgan Chase. In addition to that, Byline Bancorp is 1.89 times more volatile than JPMorgan Chase Co. It trades about 0.09 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.41 per unit of volatility. If you would invest  18,345  in JPMorgan Chase Co on December 29, 2023 and sell it today you would earn a total of  1,607  from holding JPMorgan Chase Co or generate 8.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Byline Bancorp  vs.  JPMorgan Chase Co

 Performance 
       Timeline  
Byline Bancorp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 unfluctuating 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.
JPMorgan Chase 

Risk-Adjusted Performance

25 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Byline Bancorp and JPMorgan Chase Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Byline Bancorp and JPMorgan Chase

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

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