Correlation Between KEYBANK and Coda Octopus

Can any of the company-specific risk be diversified away by investing in both KEYBANK and Coda Octopus 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 Coda Octopus 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 Coda Octopus Group, you can compare the effects of market volatilities on KEYBANK and Coda Octopus 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 Coda Octopus. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEYBANK and Coda Octopus.

Diversification Opportunities for KEYBANK and Coda Octopus

0.69

Correlation Coefficient

KEYBANK  Coda Octopus

Poor diversification

The 3 months correlation between KEYBANK and Coda is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding KEYBANK NATL ASSN and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group 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 Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of KEYBANK i.e., KEYBANK and Coda Octopus go up and down completely randomly.

Pair Corralation between KEYBANK and Coda Octopus

Assuming the 90 days trading horizon KEYBANK NATL ASSN is expected to under-perform the Coda Octopus. But the bond apears to be less risky and, when comparing its historical volatility, KEYBANK NATL ASSN is 4.47 times less risky than Coda Octopus. The bond trades about -0.13 of its potential returns per unit of risk. The Coda Octopus Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  736.00  in Coda Octopus Group on September 20, 2024 and sell it today you would earn a total of  66.00  from holding Coda Octopus Group or generate 8.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	55.56%
Values	Daily Returns

KEYBANK NATL ASSN  vs.  Coda Octopus 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 somewhat strong basic indicators, KEYBANK is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Coda Octopus Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Coda Octopus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with KEYBANK and Coda Octopus

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

The idea behind KEYBANK NATL ASSN and Coda Octopus 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.