Correlation Between Signature Bank and Hanover Bancorp
Can any of the company-specific risk be diversified away by investing in both Signature Bank and Hanover Bancorp 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 Hanover Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Signature Bank and Hanover Bancorp, you can compare the effects of market volatilities on Signature Bank and Hanover Bancorp 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 Hanover Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signature Bank and Hanover Bancorp.
Diversification Opportunities for Signature Bank and Hanover Bancorp
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Signature and Hanover is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Signature Bank and Hanover Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Bancorp 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 Hanover Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover Bancorp has no effect on the direction of Signature Bank i.e., Signature Bank and Hanover Bancorp go up and down completely randomly.
Pair Corralation between Signature Bank and Hanover Bancorp
Assuming the 90 days horizon Signature Bank is expected to generate 20.42 times more return on investment than Hanover Bancorp. However, Signature Bank is 20.42 times more volatile than Hanover Bancorp. It trades about 0.1 of its potential returns per unit of risk. Hanover Bancorp is currently generating about 0.03 per unit of risk. If you would invest 1,558 in Signature Bank on September 23, 2024 and sell it today you would lose (1,556) from holding Signature Bank or give up 99.89% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 27.77% |
Values | Daily Returns |
Signature Bank vs. Hanover Bancorp
Performance |
Timeline |
Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hanover Bancorp |
Signature Bank and Hanover Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Signature Bank and Hanover Bancorp
The main advantage of trading using opposite Signature Bank and Hanover Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signature Bank position performs unexpectedly, Hanover Bancorp 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 Hanover Bancorp will offset losses from the drop in Hanover Bancorp's long position.Signature Bank vs. Diageo PLC ADR | Signature Bank vs. Mind Medicine | Signature Bank vs. Abcellera Biologics | Signature Bank vs. National Beverage Corp |
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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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