Correlation Between Byline Bancorp and Brookfield Asset

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

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

Diversification Opportunities for Byline Bancorp and Brookfield Asset

0.08

Correlation Coefficient

Byline Bancorp  Brookfield Asset

Significant diversification

The 3 months correlation between Byline and Brookfield is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man 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 Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Brookfield Asset go up and down completely randomly.

Pair Corralation between Byline Bancorp and Brookfield Asset

Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.11 times more return on investment than Brookfield Asset. However, Byline Bancorp is 1.11 times more volatile than Brookfield Asset Management. It trades about 0.09 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about -0.16 per unit of risk. If you would invest  2,112  in Byline Bancorp on January 30, 2024 and sell it today you would earn a total of  66.00  from holding Byline Bancorp or generate 3.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Byline Bancorp  vs.  Brookfield Asset Management

Byline Bancorp

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, Byline Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Brookfield Asset Man

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brookfield Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Brookfield Asset is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Byline Bancorp and Brookfield Asset

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

The idea behind Byline Bancorp and Brookfield Asset Management 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..