Correlation Between 49327M3F9 and KeyCorp

Can any of the company-specific risk be diversified away by investing in both 49327M3F9 and KeyCorp 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 49327M3F9 and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KEY 585 15 NOV 27 and KeyCorp, you can compare the effects of market volatilities on 49327M3F9 and KeyCorp 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 49327M3F9 with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 49327M3F9 and KeyCorp.

Diversification Opportunities for 49327M3F9 and KeyCorp

0.57

Correlation Coefficient

49327M3F9  KeyCorp

Very weak diversification

The 3 months correlation between 49327M3F9 and KeyCorp is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding KEY 585 15 NOV 27 and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and 49327M3F9 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 KEY 585 15 NOV 27 are associated (or correlated) with KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of 49327M3F9 i.e., 49327M3F9 and KeyCorp go up and down completely randomly.

Pair Corralation between 49327M3F9 and KeyCorp

Assuming the 90 days trading horizon KEY 585 15 NOV 27 is expected to under-perform the KeyCorp. In addition to that, 49327M3F9 is 2.83 times more volatile than KeyCorp. It trades about -0.23 of its total potential returns per unit of risk. KeyCorp is currently generating about -0.19 per unit of volatility. If you would invest  2,467  in KeyCorp on September 25, 2024 and sell it today you would lose (92.00) from holding KeyCorp or give up 3.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

KEY 585 15 NOV 27  vs.  KeyCorp

KEY 585 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEY 585 15 NOV 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 49327M3F9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

KeyCorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KeyCorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with 49327M3F9 and KeyCorp

The main advantage of trading using opposite 49327M3F9 and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 49327M3F9 position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.

The idea behind KEY 585 15 NOV 27 and KeyCorp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.