Correlation Between KeyCorp and KERINGUNSPADR 1/10

Can any of the company-specific risk be diversified away by investing in both KeyCorp and KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KeyCorp and KERINGUNSPADR 110 EO, you can compare the effects of market volatilities on KeyCorp and KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and KERINGUNSPADR 1/10.

Diversification Opportunities for KeyCorp and KERINGUNSPADR 1/10

-0.64

Correlation Coefficient

KeyCorp  KERINGUNSPADR 1/10

Excellent diversification

The 3 months correlation between KeyCorp and KERINGUNSPADR is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and KERINGUNSPADR 110 EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KERINGUNSPADR 1/10 has no effect on the direction of KeyCorp i.e., KeyCorp and KERINGUNSPADR 1/10 go up and down completely randomly.

Pair Corralation between KeyCorp and KERINGUNSPADR 1/10

Assuming the 90 days horizon KeyCorp is expected to generate 0.77 times more return on investment than KERINGUNSPADR 1/10. However, KeyCorp is 1.29 times less risky than KERINGUNSPADR 1/10. It trades about 0.06 of its potential returns per unit of risk. KERINGUNSPADR 110 EO is currently generating about -0.06 per unit of risk. If you would invest  1,258  in KeyCorp on October 2, 2024 and sell it today you would earn a total of  370.00  from holding KeyCorp or generate 29.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

KeyCorp  vs.  KERINGUNSPADR 110 EO

KeyCorp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KeyCorp reported solid returns over the last few months and may actually be approaching a breakup point.

KERINGUNSPADR 1/10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KERINGUNSPADR 110 EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KERINGUNSPADR 1/10 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KeyCorp and KERINGUNSPADR 1/10

The main advantage of trading using opposite KeyCorp and KERINGUNSPADR 1/10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10 will offset losses from the drop in KERINGUNSPADR 1/10's long position.

The idea behind KeyCorp and KERINGUNSPADR 110 EO 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.