Correlation Between KeyCorp and Signature Bank
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Signature Bank 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 KeyCorp and Signature Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Signature Bank, you can compare the effects of market volatilities on KeyCorp and Signature Bank 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 KeyCorp with a short position of Signature Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Signature Bank.
Diversification Opportunities for KeyCorp and Signature Bank
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KeyCorp and Signature is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Signature Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signature Bank and KeyCorp 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 KeyCorp are associated (or correlated) with Signature Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signature Bank has no effect on the direction of KeyCorp i.e., KeyCorp and Signature Bank go up and down completely randomly.
Pair Corralation between KeyCorp and Signature Bank
If you would invest 1.70 in Signature Bank on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Signature Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
KeyCorp vs. Signature Bank
Performance |
| Timeline |
| KeyCorp |
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KeyCorp and Signature Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Signature Bank
The main advantage of trading using opposite KeyCorp and Signature Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Signature Bank 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 Signature Bank will offset losses from the drop in Signature Bank's long position.The idea behind KeyCorp and Signature Bank 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.| Signature Bank vs. PennantPark Floating Rate | Signature Bank vs. GMS Inc | Signature Bank vs. Stepstone Group | Signature Bank vs. Griffon |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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