Correlation Between Byline Bancorp and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Grupo Aval 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 Grupo Aval into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byline Bancorp and Grupo Aval, you can compare the effects of market volatilities on Byline Bancorp and Grupo Aval 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 Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Grupo Aval.
Diversification Opportunities for Byline Bancorp and Grupo Aval
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Byline and Grupo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Grupo Aval in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval 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 Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Grupo Aval go up and down completely randomly.
Pair Corralation between Byline Bancorp and Grupo Aval
Allowing for the 90-day total investment horizon Byline Bancorp is expected to generate 1.01 times more return on investment than Grupo Aval. However, Byline Bancorp is 1.01 times more volatile than Grupo Aval. It trades about 0.09 of its potential returns per unit of risk. Grupo Aval is currently generating about -0.08 per unit of risk. If you would invest 2,320 in Byline Bancorp on August 2, 2024 and sell it today you would earn a total of 446.00 from holding Byline Bancorp or generate 19.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Byline Bancorp vs. Grupo Aval
Performance |
Timeline |
Byline Bancorp |
Grupo Aval |
Byline Bancorp and Grupo Aval Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Byline Bancorp and Grupo Aval
The main advantage of trading using opposite Byline Bancorp and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Grupo Aval 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 Grupo Aval will offset losses from the drop in Grupo Aval's long position.Byline Bancorp vs. Affinity Bancshares | Byline Bancorp vs. Home Federal Bancorp | Byline Bancorp vs. LINKBANCORP | Byline Bancorp vs. Bankwell Financial Group |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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