Correlation Between KeyCorp and Merchants Bancorp
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Merchants 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 Merchants Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Merchants Bancorp PR, you can compare the effects of market volatilities on KeyCorp and Merchants 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 Merchants Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Merchants Bancorp.
Diversification Opportunities for KeyCorp and Merchants Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KeyCorp and Merchants is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Merchants Bancorp PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merchants 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 Merchants Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merchants Bancorp has no effect on the direction of KeyCorp i.e., KeyCorp and Merchants Bancorp go up and down completely randomly.
Pair Corralation between KeyCorp and Merchants Bancorp
If you would invest (100.00) in Merchants Bancorp PR on December 3, 2024 and sell it today you would earn a total of 100.00 from holding Merchants Bancorp PR or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
KeyCorp vs. Merchants Bancorp PR
Performance |
Timeline |
KeyCorp |
Merchants Bancorp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
KeyCorp and Merchants Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KeyCorp and Merchants Bancorp
The main advantage of trading using opposite KeyCorp and Merchants Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Merchants 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 Merchants Bancorp will offset losses from the drop in Merchants Bancorp's long position.KeyCorp vs. KeyCorp | KeyCorp vs. Regions Financial | KeyCorp vs. US Bancorp | KeyCorp vs. Fifth Third Bancorp |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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