Correlation Between KeyCorp and Mauch Chunk

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

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

Diversification Opportunities for KeyCorp and Mauch Chunk

-0.32

Correlation Coefficient

KeyCorp  Mauch Chunk

Very good diversification

The 3 months correlation between KeyCorp and Mauch is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Mauch Chunk Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mauch Chunk Trust 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 Mauch Chunk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mauch Chunk Trust has no effect on the direction of KeyCorp i.e., KeyCorp and Mauch Chunk go up and down completely randomly.

Pair Corralation between KeyCorp and Mauch Chunk

Considering the 90-day investment horizon KeyCorp is expected to generate 1.65 times more return on investment than Mauch Chunk. However, KeyCorp is 1.65 times more volatile than Mauch Chunk Trust. It trades about 0.11 of its potential returns per unit of risk. Mauch Chunk Trust is currently generating about -0.02 per unit of risk. If you would invest  1,673  in KeyCorp on September 2, 2024 and sell it today you would earn a total of  275.00  from holding KeyCorp or generate 16.44% return on investment over 90 days.

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

KeyCorp  vs.  Mauch Chunk Trust

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. In spite of fairly conflicting technical and fundamental indicators, KeyCorp showed solid returns over the last few months and may actually be approaching a breakup point.

Mauch Chunk Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mauch Chunk Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Mauch Chunk is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with KeyCorp and Mauch Chunk

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

The idea behind KeyCorp and Mauch Chunk Trust 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.