Correlation Between NYSE Composite and Signature Bank
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Signature Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Signature Bank, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Signature Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Signature Bank.
Diversification Opportunities for NYSE Composite and Signature Bank
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Signature is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Signature Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signature Bank and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Signature Bank go up and down completely randomly.
Pair Corralation between NYSE Composite and Signature Bank
If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
NYSE Composite vs. Signature Bank
Performance |
| Timeline |
NYSE Composite and Signature Bank Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Signature Bank
Pair trading matchups for Signature Bank
Pair Trading with NYSE Composite and Signature Bank
The main advantage of trading using opposite NYSE Composite and Signature Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Signature Bank vs. Zions Bancorporation | Signature Bank vs. KeyCorp | Signature Bank vs. Comerica | Signature Bank vs. First Horizon National |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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