Correlation Between Signature Bank and Bankinter

Can any of the company-specific risk be diversified away by investing in both Signature Bank and Bankinter 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 Bankinter into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Signature Bank and Bankinter SA ADR, you can compare the effects of market volatilities on Signature Bank and Bankinter 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 Bankinter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signature Bank and Bankinter.

Diversification Opportunities for Signature Bank and Bankinter

0.0

Correlation Coefficient

Signature Bank  Bankinter

Pay attention - limited upside

The 3 months correlation between Signature and Bankinter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Signature Bank and Bankinter SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter SA ADR 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 Bankinter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankinter SA ADR has no effect on the direction of Signature Bank i.e., Signature Bank and Bankinter go up and down completely randomly.

Pair Corralation between Signature Bank and Bankinter

If you would invest  906.00  in Bankinter SA ADR on December 2, 2024 and sell it today you would earn a total of  86.00  from holding Bankinter SA ADR or generate 9.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Signature Bank  vs.  Bankinter SA ADR

Signature Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Signature Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Signature Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bankinter SA ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bankinter SA ADR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Bankinter showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Signature Bank and Bankinter

The main advantage of trading using opposite Signature Bank and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signature Bank position performs unexpectedly, Bankinter 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 Bankinter will offset losses from the drop in Bankinter's long position.

The idea behind Signature Bank and Bankinter SA ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.