Correlation Between Signature Bank and First Horizon
Can any of the company-specific risk be diversified away by investing in both Signature Bank and First Horizon 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 Signature Bank and First Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Signature Bank and First Horizon National, you can compare the effects of market volatilities on Signature Bank and First Horizon 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 Signature Bank with a short position of First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signature Bank and First Horizon.
Diversification Opportunities for Signature Bank and First Horizon
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Signature and First is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Signature Bank and First Horizon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon National and Signature Bank 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 Signature Bank are associated (or correlated) with First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon National has no effect on the direction of Signature Bank i.e., Signature Bank and First Horizon go up and down completely randomly.
Pair Corralation between Signature Bank and First Horizon
If you would invest 1,699 in First Horizon National on September 3, 2024 and sell it today you would earn a total of 414.00 from holding First Horizon National or generate 24.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Signature Bank vs. First Horizon National
Performance |
| Timeline |
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Horizon National |
Signature Bank and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Signature Bank and First Horizon
The main advantage of trading using opposite Signature Bank and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signature Bank position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.| Signature Bank vs. Zions Bancorporation | Signature Bank vs. KeyCorp | Signature Bank vs. Comerica | Signature Bank vs. First Horizon National |
| First Horizon vs. JPMorgan Chase Co | First Horizon vs. Citigroup | First Horizon vs. Wells Fargo | First Horizon vs. Toronto Dominion Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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