Correlation Between Dow Jones and KEYBANK
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By analyzing existing cross correlation between Dow Jones Industrial and KEYBANK NATL ASSN, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of KEYBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and KEYBANK.
Diversification Opportunities for Dow Jones and KEYBANK
Very weak diversification
The 3 months correlation between Dow and KEYBANK is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and KEYBANK go up and down completely randomly.
Pair Corralation between Dow Jones and KEYBANK
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.31 times more return on investment than KEYBANK. However, Dow Jones is 1.31 times more volatile than KEYBANK NATL ASSN. It trades about 0.12 of its potential returns per unit of risk. KEYBANK NATL ASSN is currently generating about 0.11 per unit of risk. If you would invest 3,303,593 in Dow Jones Industrial on September 19, 2024 and sell it today you would earn a total of 929,094 from holding Dow Jones Industrial or generate 28.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 62.41% |
Values | Daily Returns |
Dow Jones Industrial vs. KEYBANK NATL ASSN
Performance |
Timeline |
Dow Jones and KEYBANK Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
KEYBANK NATL ASSN
Pair trading matchups for KEYBANK
Pair Trading with Dow Jones and KEYBANK
The main advantage of trading using opposite Dow Jones and KEYBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.Dow Jones vs. Digi International | Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. United Microelectronics | Dow Jones vs. Weibo Corp |
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Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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