Correlation Between XLMedia PLC and KeyCorp

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

By analyzing existing cross correlation between XLMedia PLC and KeyCorp, you can compare the effects of market volatilities on XLMedia PLC and KeyCorp 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 XLMedia PLC with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and KeyCorp.

Diversification Opportunities for XLMedia PLC and KeyCorp

0.63

Correlation Coefficient

XLMedia PLC  KeyCorp

Poor diversification

The 3 months correlation between XLMedia and KeyCorp is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and XLMedia PLC 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 XLMedia PLC are associated (or correlated) with KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and KeyCorp go up and down completely randomly.

Pair Corralation between XLMedia PLC and KeyCorp

Assuming the 90 days horizon XLMedia PLC is expected to generate 9.85 times less return on investment than KeyCorp. In addition to that, XLMedia PLC is 3.23 times more volatile than KeyCorp. It trades about 0.0 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.09 per unit of volatility. If you would invest  1,494  in KeyCorp on October 8, 2024 and sell it today you would earn a total of  155.00  from holding KeyCorp or generate 10.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

XLMedia PLC  vs.  KeyCorp

XLMedia PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XLMedia PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, XLMedia PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

KeyCorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KeyCorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with XLMedia PLC and KeyCorp

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

The idea behind XLMedia PLC and KeyCorp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..