Correlation Between KeyCorp and PS International

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

By analyzing existing cross correlation between KeyCorp and PS International Group, you can compare the effects of market volatilities on KeyCorp and PS International 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 PS International. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and PS International.

Diversification Opportunities for KeyCorp and PS International

0.0

Correlation Coefficient

KeyCorp  PS International

Pay attention - limited upside

The 3 months correlation between KeyCorp and PSIG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and PS International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PS International 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 PS International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PS International has no effect on the direction of KeyCorp i.e., KeyCorp and PS International go up and down completely randomly.

Pair Corralation between KeyCorp and PS International

Assuming the 90 days trading horizon KeyCorp is expected to generate 4.09 times less return on investment than PS International. But when comparing it to its historical volatility, KeyCorp is 12.17 times less risky than PS International. It trades about 0.04 of its potential returns per unit of risk. PS International Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  58.00  in PS International Group on December 2, 2024 and sell it today you would lose (11.00) from holding PS International Group or give up 18.97% of portfolio value over 90 days.

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

KeyCorp  vs.  PS International Group

KeyCorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, KeyCorp is not utilizing all of its potentials. The new stock price confusion, may contribute to short-horizon losses for the traders.

PS International

Risk-Adjusted Performance

Very Weak

Over the last 90 days PS International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile forward indicators, PS International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with KeyCorp and PS International

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

The idea behind KeyCorp and PS International Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.