Correlation Between Peoples Fin and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Peoples Fin 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 Peoples Fin and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peoples Fin and Byline Bancorp, you can compare the effects of market volatilities on Peoples Fin 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 Peoples Fin with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Fin and Byline Bancorp.
Diversification Opportunities for Peoples Fin and Byline Bancorp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Peoples and Byline is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Fin and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Peoples Fin 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 Peoples Fin 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 Peoples Fin i.e., Peoples Fin and Byline Bancorp go up and down completely randomly.
Pair Corralation between Peoples Fin and Byline Bancorp
Given the investment horizon of 90 days Peoples Fin is expected to under-perform the Byline Bancorp. In addition to that, Peoples Fin is 1.09 times more volatile than Byline Bancorp. It trades about -0.19 of its total potential returns per unit of risk. Byline Bancorp is currently generating about -0.02 per unit of volatility. If you would invest 2,102 in Byline Bancorp on January 21, 2024 and sell it today you would lose (30.00) from holding Byline Bancorp or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Peoples Fin vs. Byline Bancorp
Performance |
| Timeline |
| Peoples Fin |
| Byline Bancorp |
Peoples Fin and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Fin and Byline Bancorp
The main advantage of trading using opposite Peoples Fin and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Fin 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.| Peoples Fin vs. Cullman Bancorp | Peoples Fin vs. Home Federal Bancorp | Peoples Fin vs. HMN Financial | Peoples Fin vs. Magyar Bancorp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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