Correlation Between Western Alliance and MBank SA
Can any of the company-specific risk be diversified away by investing in both Western Alliance and MBank SA 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 Western Alliance and MBank SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Alliance Bancorporation and mBank SA, you can compare the effects of market volatilities on Western Alliance and MBank SA 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 Western Alliance with a short position of MBank SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Alliance and MBank SA.
Diversification Opportunities for Western Alliance and MBank SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and MBank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Alliance Bancorp. and mBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mBank SA and Western Alliance 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 Western Alliance Bancorporation are associated (or correlated) with MBank SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mBank SA has no effect on the direction of Western Alliance i.e., Western Alliance and MBank SA go up and down completely randomly.
Pair Corralation between Western Alliance and MBank SA
If you would invest 4,847 in Western Alliance Bancorporation on September 14, 2024 and sell it today you would earn a total of 4,128 from holding Western Alliance Bancorporation or generate 85.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Western Alliance Bancorp. vs. mBank SA
Performance |
| Timeline |
| Western Alliance Ban |
| mBank SA |
Western Alliance and MBank SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Alliance and MBank SA
The main advantage of trading using opposite Western Alliance and MBank SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Alliance position performs unexpectedly, MBank SA 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 MBank SA will offset losses from the drop in MBank SA's long position.| Western Alliance vs. Zions Bancorporation | Western Alliance vs. KeyCorp | Western Alliance vs. First Horizon National | Western Alliance vs. Comerica |
| MBank SA vs. Zions Bancorporation | MBank SA vs. Huntington Bancshares Incorporated | MBank SA vs. Comerica | MBank SA vs. Western Alliance Bancorporation |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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