Correlation Between BankUnited and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both BankUnited 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 BankUnited and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BankUnited and Byline Bancorp, you can compare the effects of market volatilities on BankUnited 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 BankUnited with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankUnited and Byline Bancorp.
Diversification Opportunities for BankUnited and Byline Bancorp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BankUnited and Byline is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding BankUnited and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and BankUnited 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 BankUnited 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 BankUnited i.e., BankUnited and Byline Bancorp go up and down completely randomly.
Pair Corralation between BankUnited and Byline Bancorp
Considering the 90-day investment horizon BankUnited is expected to generate 1.5 times more return on investment than Byline Bancorp. However, BankUnited is 1.5 times more volatile than Byline Bancorp. It trades about 0.06 of its potential returns per unit of risk. Byline Bancorp is currently generating about 0.04 per unit of risk. If you would invest 2,051 in BankUnited on January 26, 2024 and sell it today you would earn a total of 727.00 from holding BankUnited or generate 35.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BankUnited vs. Byline Bancorp
Performance |
| Timeline |
| BankUnited |
| Byline Bancorp |
BankUnited and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BankUnited and Byline Bancorp
The main advantage of trading using opposite BankUnited and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankUnited 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.| BankUnited vs. International Bancshares | BankUnited vs. Hilltop Holdings | BankUnited vs. FB Financial Corp | BankUnited vs. Red River Bancshares |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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