Correlation Between Byline Bancorp and MetLife
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and MetLife 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 MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and MetLife, you can compare the effects of market volatilities on Byline Bancorp and MetLife 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 MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and MetLife.
Diversification Opportunities for Byline Bancorp and MetLife
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Byline and MetLife is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife 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 MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and MetLife go up and down completely randomly.
Pair Corralation between Byline Bancorp and MetLife
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 2.25 times more return on investment than MetLife. However, Byline Bancorp is 2.25 times more volatile than MetLife. It trades about 0.09 of its potential returns per unit of risk. MetLife is currently generating about -0.03 per unit of risk. If you would invest 2,069 in Byline Bancorp on January 25, 2024 and sell it today you would earn a total of 74.00 from holding Byline Bancorp or generate 3.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Byline Bancorp vs. MetLife
Performance |
Timeline |
Byline Bancorp |
MetLife |
Byline Bancorp and MetLife Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Byline Bancorp and MetLife
The main advantage of trading using opposite Byline Bancorp and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. HMN Financial | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP |
MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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