Correlation Between KEYBANK and G III

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

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

Diversification Opportunities for KEYBANK and G III

0.1

Correlation Coefficient

KEYBANK  G III

Average diversification

The 3 months correlation between KEYBANK and GIII is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding KEYBANK NATL ASSN and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel and KEYBANK 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 KEYBANK NATL ASSN are associated (or correlated) with G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of KEYBANK i.e., KEYBANK and G III go up and down completely randomly.

Pair Corralation between KEYBANK and G III

Assuming the 90 days trading horizon KEYBANK NATL ASSN is expected to under-perform the G III. But the bond apears to be less risky and, when comparing its historical volatility, KEYBANK NATL ASSN is 3.91 times less risky than G III. The bond trades about -0.03 of its potential returns per unit of risk. The G III Apparel Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,657  in G III Apparel Group on October 26, 2024 and sell it today you would earn a total of  1,532  from holding G III Apparel Group or generate 92.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	59.11%
Values	Daily Returns

KEYBANK NATL ASSN  vs.  G III Apparel Group

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 conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for KEYBANK NATL ASSN investors.

G III Apparel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in G III Apparel Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, G III is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with KEYBANK and G III

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

The idea behind KEYBANK NATL ASSN and G III Apparel Group 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.