Correlation Between Signature Bank and Western Alliance
Can any of the company-specific risk be diversified away by investing in both Signature Bank and Western Alliance 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 Western Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Signature Bank and Western Alliance Bancorporation, you can compare the effects of market volatilities on Signature Bank and Western Alliance 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 Western Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signature Bank and Western Alliance.
Diversification Opportunities for Signature Bank and Western Alliance
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Signature and Western is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Signature Bank and Western Alliance Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Alliance Ban 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 Western Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Alliance Ban has no effect on the direction of Signature Bank i.e., Signature Bank and Western Alliance go up and down completely randomly.
Pair Corralation between Signature Bank and Western Alliance
If you would invest 8,207 in Western Alliance Bancorporation on September 3, 2024 and sell it today you would earn a total of 1,154 from holding Western Alliance Bancorporation or generate 14.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Signature Bank vs. Western Alliance Bancorp.
Performance |
| Timeline |
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Alliance Ban |
Signature Bank and Western Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Signature Bank and Western Alliance
The main advantage of trading using opposite Signature Bank and Western Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signature Bank position performs unexpectedly, Western Alliance 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 Western Alliance will offset losses from the drop in Western Alliance's long position.| Signature Bank vs. Zions Bancorporation | Signature Bank vs. KeyCorp | Signature Bank vs. Comerica | Signature Bank vs. First Horizon National |
| Western Alliance vs. JPMorgan Chase Co | Western Alliance vs. Citigroup | Western Alliance vs. Wells Fargo | Western Alliance 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |