Correlation Between Signature Bank and Peoples Bancorp

Can any of the company-specific risk be diversified away by investing in both Signature Bank and Peoples 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 Peoples 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 Peoples Bancorp of, you can compare the effects of market volatilities on Signature Bank and Peoples 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 Peoples Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signature Bank and Peoples Bancorp.

Diversification Opportunities for Signature Bank and Peoples Bancorp

-0.43

Correlation Coefficient

Signature Bank  Peoples Bancorp

Very good diversification

The 3 months correlation between Signature and Peoples is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Signature Bank and Peoples Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples 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 Peoples Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Bancorp has no effect on the direction of Signature Bank i.e., Signature Bank and Peoples Bancorp go up and down completely randomly.

Pair Corralation between Signature Bank and Peoples Bancorp

If you would invest  2,668  in Peoples Bancorp of on September 24, 2024 and sell it today you would earn a total of  501.00  from holding Peoples Bancorp of or generate 18.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Signature Bank  vs.  Peoples Bancorp of

Signature Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Signature Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Signature Bank is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Peoples Bancorp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Peoples Bancorp of are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Peoples Bancorp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Signature Bank and Peoples Bancorp

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

The idea behind Signature Bank and Peoples Bancorp of 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.