Correlation Between Byline Bancorp and Pfizer

Can any of the company-specific risk be diversified away by investing in both Byline Bancorp and Pfizer 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 Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Byline Bancorp and Pfizer Inc, you can compare the effects of market volatilities on Byline Bancorp and Pfizer 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 Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byline Bancorp and Pfizer.

Diversification Opportunities for Byline Bancorp and Pfizer

0.75

Correlation Coefficient

Byline Bancorp  Pfizer

Poor diversification

The 3 months correlation between Byline and Pfizer is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc 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 Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Pfizer go up and down completely randomly.

Pair Corralation between Byline Bancorp and Pfizer

Allowing for the 90-day total investment horizon Byline Bancorp is expected to under-perform the Pfizer. In addition to that, Byline Bancorp is 1.0 times more volatile than Pfizer Inc. It trades about -0.19 of its total potential returns per unit of risk. Pfizer Inc is currently generating about 0.03 per unit of volatility. If you would invest  2,875  in Pfizer Inc on June 29, 2024 and sell it today you would earn a total of  22.00  from holding Pfizer Inc or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Byline Bancorp  vs.  Pfizer Inc

Byline Bancorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Byline Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Byline Bancorp may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Pfizer Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Byline Bancorp and Pfizer

The main advantage of trading using opposite Byline Bancorp and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byline Bancorp position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer's long position.

The idea behind Byline Bancorp and Pfizer Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.