Correlation Between KeyCorp and Capital Bancorp
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Capital Bancorp 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 KeyCorp and Capital Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Capital Bancorp, you can compare the effects of market volatilities on KeyCorp and Capital Bancorp 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 KeyCorp with a short position of Capital Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Capital Bancorp.
Diversification Opportunities for KeyCorp and Capital Bancorp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KeyCorp and Capital is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Capital Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Bancorp and KeyCorp 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 KeyCorp are associated (or correlated) with Capital Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Bancorp has no effect on the direction of KeyCorp i.e., KeyCorp and Capital Bancorp go up and down completely randomly.
Pair Corralation between KeyCorp and Capital Bancorp
Assuming the 90 days trading horizon KeyCorp is expected to under-perform the Capital Bancorp. But the preferred stock apears to be less risky and, when comparing its historical volatility, KeyCorp is 1.93 times less risky than Capital Bancorp. The preferred stock trades about -0.16 of its potential returns per unit of risk. The Capital Bancorp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,858 in Capital Bancorp on September 24, 2024 and sell it today you would earn a total of 74.00 from holding Capital Bancorp or generate 2.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KeyCorp vs. Capital Bancorp
Performance |
Timeline |
KeyCorp |
Capital Bancorp |
KeyCorp and Capital Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KeyCorp and Capital Bancorp
The main advantage of trading using opposite KeyCorp and Capital Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Capital Bancorp 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 Capital Bancorp will offset losses from the drop in Capital Bancorp's long position.KeyCorp vs. Tectonic Financial PR | KeyCorp vs. First Guaranty Bancshares | KeyCorp vs. First Merchants | KeyCorp vs. Metropolitan Bank Holding |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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