KBW Bank Sector Index is a market capitalization weighted index composed of 24 different banking stocks in US and it is traded in the Philadelphia stock exchange. The index was initiated in the year of 1962. The index is evaluated at least annually by KBW to assure that the composition is highly representative of the banking Industry. Options trading started on September 21st 1992. In the month of January 2007 it has tested a high of 117.9, but later in the year 2009 February it has tested an all time low of 24.16, due to the financial turmoil in US.
It is interesting to note that the correlation between Nifty and KBW Bank Index over a period of 12 years is mere 0.21%, suggesting no correlation. BSE Bankex and KBW Bank Index over a period of 6 years is just 0.03%, indicating there is no correlation. The extreme low correlation was partly due to the diversity of the management of banking institutions coupled with diversed rules and regulations, and frequent bank failures in US. The given graphs are self indicative.
It is interesting to note that the correlation between Nifty and KBW Bank Index over a period of 12 years is mere 0.21%, suggesting no correlation. BSE Bankex and KBW Bank Index over a period of 6 years is just 0.03%, indicating there is no correlation. The extreme low correlation was partly due to the diversity of the management of banking institutions coupled with diversed rules and regulations, and frequent bank failures in US. The given graphs are self indicative.
KBW INDEX CONSTITUENTS
