Correlation Between Applied Blockchain and KEYCORP

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

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

Diversification Opportunities for Applied Blockchain and KEYCORP

-0.19

Correlation Coefficient

Applied Blockchain  KEYCORP

Good diversification

The 3 months correlation between Applied and KEYCORP is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and KEYCORP MTN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYCORP MTN and Applied Blockchain 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 Applied Blockchain 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 MTN has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and KEYCORP go up and down completely randomly.

Pair Corralation between Applied Blockchain and KEYCORP

Given the investment horizon of 90 days Applied Blockchain is expected to generate 10.8 times more return on investment than KEYCORP. However, Applied Blockchain is 10.8 times more volatile than KEYCORP MTN. It trades about 0.07 of its potential returns per unit of risk. KEYCORP MTN is currently generating about 0.0 per unit of risk. If you would invest  184.00  in Applied Blockchain on September 21, 2024 and sell it today you would earn a total of  639.00  from holding Applied Blockchain or generate 347.28% return on investment over 90 days.

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

Applied Blockchain  vs.  KEYCORP MTN

Applied Blockchain

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Blockchain are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Applied Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

KEYCORP MTN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEYCORP MTN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KEYCORP MTN investors.

Pair Trading with Applied Blockchain and KEYCORP

The main advantage of trading using opposite Applied Blockchain and KEYCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain 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 Applied Blockchain and KEYCORP MTN 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.