Correlation Between Inflection Point and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Inflection Point 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 Inflection Point and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and KeyCorp, you can compare the effects of market volatilities on Inflection Point 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 Inflection Point with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and KeyCorp.
Diversification Opportunities for Inflection Point and KeyCorp
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inflection and KeyCorp is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and KeyCorp go up and down completely randomly.
Pair Corralation between Inflection Point and KeyCorp
Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 4.26 times more return on investment than KeyCorp. However, Inflection Point is 4.26 times more volatile than KeyCorp. It trades about 0.11 of its potential returns per unit of risk. KeyCorp is currently generating about -0.13 per unit of risk. If you would invest 1,083 in Inflection Point Acquisition on September 25, 2024 and sell it today you would earn a total of 252.00 from holding Inflection Point Acquisition or generate 23.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Inflection Point Acquisition vs. KeyCorp
Performance |
Timeline |
Inflection Point Acq |
KeyCorp |
Inflection Point and KeyCorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inflection Point and KeyCorp
The main advantage of trading using opposite Inflection Point and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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.Inflection Point vs. Aquagold International | Inflection Point vs. Morningstar Unconstrained Allocation | Inflection Point vs. Thrivent High Yield | Inflection Point vs. Via Renewables |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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