Correlation Between Recursion Pharmaceuticals and KEYBANK

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

By analyzing existing cross correlation between Recursion Pharmaceuticals and KEYBANK NATL ASSN, you can compare the effects of market volatilities on Recursion Pharmaceuticals and KEYBANK 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 Recursion Pharmaceuticals with a short position of KEYBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recursion Pharmaceuticals and KEYBANK.

Diversification Opportunities for Recursion Pharmaceuticals and KEYBANK

0.2

Correlation Coefficient

Recursion Pharmaceuticals  KEYBANK

Modest diversification

The 3 months correlation between Recursion and KEYBANK is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Recursion Pharmaceuticals and KEYBANK NATL ASSN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYBANK NATL ASSN and Recursion Pharmaceuticals 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 Recursion Pharmaceuticals are associated (or correlated) with KEYBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYBANK NATL ASSN has no effect on the direction of Recursion Pharmaceuticals i.e., Recursion Pharmaceuticals and KEYBANK go up and down completely randomly.

Pair Corralation between Recursion Pharmaceuticals and KEYBANK

Given the investment horizon of 90 days Recursion Pharmaceuticals is expected to generate 12.81 times more return on investment than KEYBANK. However, Recursion Pharmaceuticals is 12.81 times more volatile than KEYBANK NATL ASSN. It trades about 0.0 of its potential returns per unit of risk. KEYBANK NATL ASSN is currently generating about -0.12 per unit of risk. If you would invest  667.00  in Recursion Pharmaceuticals on September 21, 2024 and sell it today you would lose (63.00) from holding Recursion Pharmaceuticals or give up 9.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	56.25%
Values	Daily Returns

Recursion Pharmaceuticals  vs.  KEYBANK NATL ASSN

Recursion Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Recursion Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Recursion Pharmaceuticals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

KEYBANK NATL ASSN

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Recursion Pharmaceuticals and KEYBANK

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

The idea behind Recursion Pharmaceuticals and KEYBANK NATL ASSN 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.