Correlation Between KeyCorp and 49327M3F9

Can any of the company-specific risk be diversified away by investing in both KeyCorp and 49327M3F9 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 49327M3F9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KeyCorp and KEY 585 15 NOV 27, you can compare the effects of market volatilities on KeyCorp and 49327M3F9 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 49327M3F9. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and 49327M3F9.

Diversification Opportunities for KeyCorp and 49327M3F9

0.52

Correlation Coefficient

KeyCorp  49327M3F9

Very weak diversification

The 3 months correlation between KeyCorp and 49327M3F9 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and KEY 585 15 NOV 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEY 585 15 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 49327M3F9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEY 585 15 has no effect on the direction of KeyCorp i.e., KeyCorp and 49327M3F9 go up and down completely randomly.

Pair Corralation between KeyCorp and 49327M3F9

Assuming the 90 days trading horizon KeyCorp is expected to under-perform the 49327M3F9. But the preferred stock apears to be less risky and, when comparing its historical volatility, KeyCorp is 3.9 times less risky than 49327M3F9. The preferred stock trades about -0.14 of its potential returns per unit of risk. The KEY 585 15 NOV 27 is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  10,227  in KEY 585 15 NOV 27 on September 21, 2024 and sell it today you would lose (296.00) from holding KEY 585 15 NOV 27 or give up 2.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

KeyCorp  vs.  KEY 585 15 NOV 27

KeyCorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KeyCorp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

KEY 585 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEY 585 15 NOV 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 49327M3F9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KeyCorp and 49327M3F9

The main advantage of trading using opposite KeyCorp and 49327M3F9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, 49327M3F9 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 49327M3F9 will offset losses from the drop in 49327M3F9's long position.

The idea behind KeyCorp and KEY 585 15 NOV 27 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.