Correlation Between Signature Bank and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Signature Bank and KeyCorp 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 KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Signature Bank and KeyCorp, you can compare the effects of market volatilities on Signature Bank and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signature Bank and KeyCorp.
Diversification Opportunities for Signature Bank and KeyCorp
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Signature and KeyCorp is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Signature Bank and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Signature Bank i.e., Signature Bank and KeyCorp go up and down completely randomly.
Pair Corralation between Signature Bank and KeyCorp
Assuming the 90 days horizon Signature Bank is expected to generate 11.36 times more return on investment than KeyCorp. However, Signature Bank is 11.36 times more volatile than KeyCorp. It trades about 0.09 of its potential returns per unit of risk. KeyCorp is currently generating about 0.03 per unit of risk. If you would invest 1,583 in Signature Bank on August 30, 2024 and sell it today you would lose (1,581) from holding Signature Bank or give up 99.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 30.85% |
| Values | Daily Returns |
Signature Bank vs. KeyCorp
Performance |
| Timeline |
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KeyCorp |
Signature Bank and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Signature Bank and KeyCorp
The main advantage of trading using opposite Signature Bank and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signature Bank position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.| Signature Bank vs. PennantPark Floating Rate | Signature Bank vs. GMS Inc | Signature Bank vs. Stepstone Group | Signature Bank vs. Griffon |
| KeyCorp vs. KeyCorp | KeyCorp vs. Regions Financial | KeyCorp vs. US Bancorp | KeyCorp vs. Fifth Third Bancorp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |