Correlation Between FVCBankcorp and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both FVCBankcorp 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 FVCBankcorp and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FVCBankcorp and Byline Bancorp, you can compare the effects of market volatilities on FVCBankcorp 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 FVCBankcorp with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FVCBankcorp and Byline Bancorp.
Diversification Opportunities for FVCBankcorp and Byline Bancorp
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FVCBankcorp and Byline is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding FVCBankcorp and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and FVCBankcorp 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 FVCBankcorp 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 FVCBankcorp i.e., FVCBankcorp and Byline Bancorp go up and down completely randomly.
Pair Corralation between FVCBankcorp and Byline Bancorp
Given the investment horizon of 90 days FVCBankcorp is expected to generate 1.0 times less return on investment than Byline Bancorp. But when comparing it to its historical volatility, FVCBankcorp is 1.23 times less risky than Byline Bancorp. It trades about 0.11 of its potential returns per unit of risk. Byline Bancorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,094 in Byline Bancorp on December 29, 2023 and sell it today you would earn a total of 67.00 from holding Byline Bancorp or generate 3.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
FVCBankcorp vs. Byline Bancorp
Performance |
Timeline |
FVCBankcorp |
Byline Bancorp |
FVCBankcorp and Byline Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FVCBankcorp and Byline Bancorp
The main advantage of trading using opposite FVCBankcorp and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FVCBankcorp 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.FVCBankcorp vs. Merchants Bancorp | FVCBankcorp vs. Axos Financial | FVCBankcorp vs. Regions Financial | FVCBankcorp vs. Regions Financial |
Byline Bancorp vs. Merchants Bancorp | Byline Bancorp vs. Axos Financial | Byline Bancorp vs. Regions Financial | Byline Bancorp vs. Regions Financial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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