Correlation Between Signature Bank and Meridian Bank
Can any of the company-specific risk be diversified away by investing in both Signature Bank and Meridian 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 Signature Bank and Meridian Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Signature Bank and Meridian Bank, you can compare the effects of market volatilities on Signature Bank and Meridian 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 Signature Bank with a short position of Meridian Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signature Bank and Meridian Bank.
Diversification Opportunities for Signature Bank and Meridian Bank
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Signature and Meridian is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Signature Bank and Meridian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Bank 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 Meridian Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Bank has no effect on the direction of Signature Bank i.e., Signature Bank and Meridian Bank go up and down completely randomly.
Pair Corralation between Signature Bank and Meridian Bank
If you would invest 1,155 in Meridian Bank on November 2, 2024 and sell it today you would earn a total of 506.00 from holding Meridian Bank or generate 43.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.97% |
| Values | Daily Returns |
Signature Bank vs. Meridian Bank
Performance |
| Timeline |
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Meridian Bank |
Signature Bank and Meridian Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Signature Bank and Meridian Bank
The main advantage of trading using opposite Signature Bank and Meridian Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signature Bank position performs unexpectedly, Meridian 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 Meridian Bank will offset losses from the drop in Meridian Bank's long position.| Signature Bank vs. Vital Farms | Signature Bank vs. Lifeway Foods | Signature Bank vs. Iridium Communications | Signature Bank vs. Tesla Inc |
| Meridian Bank vs. Community West Bancshares | Meridian Bank vs. Investar Holding Corp | Meridian Bank vs. Finward Bancorp | Meridian Bank vs. First Financial Northwest |
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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