Correlation Between KEYBANK and Coupang LLC

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

Diversification Opportunities for KEYBANK and Coupang LLC

0.1

Correlation Coefficient

KEYBANK  Coupang LLC

Average diversification

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

Pair Corralation between KEYBANK and Coupang LLC

Assuming the 90 days trading horizon KEYBANK is expected to generate 27.06 times less return on investment than Coupang LLC. But when comparing it to its historical volatility, KEYBANK NATL ASSN is 3.04 times less risky than Coupang LLC. It trades about 0.0 of its potential returns per unit of risk. Coupang LLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,691  in Coupang LLC on October 4, 2024 and sell it today you would earn a total of  538.00  from holding Coupang LLC or generate 31.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.27%
Values	Daily Returns

KEYBANK NATL ASSN  vs.  Coupang LLC

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.

Coupang LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coupang LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with KEYBANK and Coupang LLC

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

The idea behind KEYBANK NATL ASSN and Coupang LLC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.