Correlation Between Fifth Third and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Fifth Third 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 Fifth Third and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fifth Third Bancorp and Byline Bancorp, you can compare the effects of market volatilities on Fifth Third 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 Fifth Third with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fifth Third and Byline Bancorp.
Diversification Opportunities for Fifth Third and Byline Bancorp
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fifth and Byline is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fifth Third Bancorp and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Fifth Third 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 Fifth Third 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 Fifth Third i.e., Fifth Third and Byline Bancorp go up and down completely randomly.
Pair Corralation between Fifth Third and Byline Bancorp
Given the investment horizon of 90 days Fifth Third Bancorp is expected to generate 0.92 times more return on investment than Byline Bancorp. However, Fifth Third Bancorp is 1.09 times less risky than Byline Bancorp. It trades about 0.04 of its potential returns per unit of risk. Byline Bancorp is currently generating about -0.07 per unit of risk. If you would invest 3,346 in Fifth Third Bancorp on January 17, 2024 and sell it today you would earn a total of 116.00 from holding Fifth Third Bancorp or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fifth Third Bancorp vs. Byline Bancorp
Performance |
| Timeline |
| Fifth Third Bancorp |
| Byline Bancorp |
Fifth Third and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fifth Third and Byline Bancorp
The main advantage of trading using opposite Fifth Third and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fifth Third 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 Fifth Third Bancorp 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.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |