Correlation Between Highlands Bankshares and Byline Bancorp
Can any of the company-specific risk be diversified away by investing in both Highlands Bankshares 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 Highlands Bankshares and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlands Bankshares and Byline Bancorp, you can compare the effects of market volatilities on Highlands Bankshares 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 Highlands Bankshares with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlands Bankshares and Byline Bancorp.
Diversification Opportunities for Highlands Bankshares and Byline Bancorp
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highlands and Byline is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Highlands Bankshares and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Highlands Bankshares 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 Highlands Bankshares 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 Highlands Bankshares i.e., Highlands Bankshares and Byline Bancorp go up and down completely randomly.
Pair Corralation between Highlands Bankshares and Byline Bancorp
Given the investment horizon of 90 days Highlands Bankshares is expected to generate 0.66 times more return on investment than Byline Bancorp. However, Highlands Bankshares is 1.51 times less risky than Byline Bancorp. It trades about 0.01 of its potential returns per unit of risk. Byline Bancorp is currently generating about -0.08 per unit of risk. If you would invest 3,600 in Highlands Bankshares on January 20, 2024 and sell it today you would earn a total of 0.00 from holding Highlands Bankshares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Highlands Bankshares vs. Byline Bancorp
Performance |
| Timeline |
| Highlands Bankshares |
| Byline Bancorp |
Highlands Bankshares and Byline Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlands Bankshares and Byline Bancorp
The main advantage of trading using opposite Highlands Bankshares and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlands Bankshares 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.| Highlands Bankshares vs. First Bancorp | Highlands Bankshares vs. LINKBANCORP | Highlands Bankshares vs. Cullman Bancorp | Highlands Bankshares vs. Bankwell Financial Group |
| Byline Bancorp vs. Finward Bancorp | Byline Bancorp vs. Great Southern Bancorp | Byline Bancorp vs. First Mid Illinois | Byline Bancorp vs. Franklin Financial Services |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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