Correlation Between Consumers Bancorp and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Consumers Bancorp 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 Consumers Bancorp and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consumers Bancorp and Byline Bancorp, you can compare the effects of market volatilities on Consumers Bancorp 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 Consumers Bancorp with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consumers Bancorp and Byline Bancorp.
Diversification Opportunities for Consumers Bancorp and Byline Bancorp
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Consumers and Byline is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Consumers Bancorp and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Consumers 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 Consumers Bancorp 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 Consumers Bancorp i.e., Consumers Bancorp and Byline Bancorp go up and down completely randomly.
Pair Corralation between Consumers Bancorp and Byline Bancorp
Given the investment horizon of 90 days Consumers Bancorp is expected to under-perform the Byline Bancorp. But the otc stock apears to be less risky and, when comparing its historical volatility, Consumers Bancorp is 3.02 times less risky than Byline Bancorp. The otc stock trades about -0.1 of its potential returns per unit of risk. The Byline Bancorp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,046 in Byline Bancorp on January 26, 2024 and sell it today you would earn a total of 97.00 from holding Byline Bancorp or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consumers Bancorp vs. Byline Bancorp
Performance |
| Timeline |
| Consumers Bancorp |
| Byline Bancorp |
Consumers Bancorp and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consumers Bancorp and Byline Bancorp
The main advantage of trading using opposite Consumers Bancorp and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consumers Bancorp 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.| Consumers Bancorp vs. Stevia Nutra Corp | Consumers Bancorp vs. Regent Ventures | Consumers Bancorp vs. Element Global | Consumers Bancorp vs. Affiliated Resources Corp |
| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. HMN Financial | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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