Correlation Between Byline Bancorp and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Metropolitan Bank 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 Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Metropolitan Bank Holding, you can compare the effects of market volatilities on Byline Bancorp and Metropolitan Bank 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 Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Metropolitan Bank.
Diversification Opportunities for Byline Bancorp and Metropolitan Bank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Byline and Metropolitan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Metropolitan Bank Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank Holding 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 Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank Holding has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Byline Bancorp and Metropolitan Bank
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 0.52 times more return on investment than Metropolitan Bank. However, Byline Bancorp is 1.93 times less risky than Metropolitan Bank. It trades about 0.02 of its potential returns per unit of risk. Metropolitan Bank Holding is currently generating about 0.01 per unit of risk. If you would invest 2,003 in Byline Bancorp on January 23, 2024 and sell it today you would earn a total of 87.00 from holding Byline Bancorp or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byline Bancorp vs. Metropolitan Bank Holding
Performance |
| Timeline |
| Byline Bancorp |
| Metropolitan Bank Holding |
Byline Bancorp and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byline Bancorp and Metropolitan Bank
The main advantage of trading using opposite Byline Bancorp and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| Byline Bancorp vs. HMN Financial | Byline Bancorp vs. Lake Shore Bancorp | Byline Bancorp vs. Rhinebeck Bancorp |
| Metropolitan Bank vs. HMN Financial | Metropolitan Bank vs. Lake Shore Bancorp | Metropolitan Bank vs. Rhinebeck 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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