Correlation Between Byline Bancorp and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Eagle Financial 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 Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Eagle Financial Services, you can compare the effects of market volatilities on Byline Bancorp and Eagle Financial 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 Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Eagle Financial.
Diversification Opportunities for Byline Bancorp and Eagle Financial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Byline and Eagle is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services 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 Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Eagle Financial go up and down completely randomly.
Pair Corralation between Byline Bancorp and Eagle Financial
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 3.14 times more return on investment than Eagle Financial. However, Byline Bancorp is 3.14 times more volatile than Eagle Financial Services. It trades about 0.12 of its potential returns per unit of risk. Eagle Financial Services is currently generating about -0.35 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Eagle Financial Services
Performance |
| Timeline |
| Byline Bancorp |
| Eagle Financial Services |
Byline Bancorp and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Eagle Financial
The main advantage of trading using opposite Byline Bancorp and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Eagle Financial 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 Eagle Financial will offset losses from the drop in Eagle Financial's long position.| Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. HMN Financial | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP |
| Eagle Financial vs. Stevia Nutra Corp | Eagle Financial vs. Regent Ventures | Eagle Financial vs. Element Global | Eagle Financial vs. Affiliated Resources Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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