Correlation Between Capital Clean and KEYBANK

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

By analyzing existing cross correlation between Capital Clean Energy and KEYBANK NATL ASSN, you can compare the effects of market volatilities on Capital Clean and KEYBANK 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 Capital Clean with a short position of KEYBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and KEYBANK.

Diversification Opportunities for Capital Clean and KEYBANK

-0.05

Correlation Coefficient

Capital Clean  KEYBANK

Good diversification

The 3 months correlation between Capital and KEYBANK is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and KEYBANK NATL ASSN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYBANK NATL ASSN and Capital Clean 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 Capital Clean Energy are associated (or correlated) with KEYBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYBANK NATL ASSN has no effect on the direction of Capital Clean i.e., Capital Clean and KEYBANK go up and down completely randomly.

Pair Corralation between Capital Clean and KEYBANK

Given the investment horizon of 90 days Capital Clean Energy is expected to generate 0.53 times more return on investment than KEYBANK. However, Capital Clean Energy is 1.87 times less risky than KEYBANK. It trades about 0.0 of its potential returns per unit of risk. KEYBANK NATL ASSN is currently generating about -0.39 per unit of risk. If you would invest  1,825  in Capital Clean Energy on October 9, 2024 and sell it today you would lose (1.00) from holding Capital Clean Energy or give up 0.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	52.63%
Values	Daily Returns

Capital Clean Energy  vs.  KEYBANK NATL ASSN

Capital Clean Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Clean Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Capital Clean is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

KEYBANK NATL ASSN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEYBANK NATL ASSN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for KEYBANK NATL ASSN investors.

Pair Trading with Capital Clean and KEYBANK

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

The idea behind Capital Clean Energy and KEYBANK NATL ASSN 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.