Correlation Between KEYBANK and Hochschild Mining

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

Diversification Opportunities for KEYBANK and Hochschild Mining

0.18

Correlation Coefficient

KEYBANK  Hochschild Mining

Average diversification

The 3 months correlation between KEYBANK and Hochschild is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding KEYBANK NATL ASSN and Hochschild Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochschild Mining PLC 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 Hochschild Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochschild Mining PLC has no effect on the direction of KEYBANK i.e., KEYBANK and Hochschild Mining go up and down completely randomly.

Pair Corralation between KEYBANK and Hochschild Mining

Assuming the 90 days trading horizon KEYBANK NATL ASSN is expected to generate 0.18 times more return on investment than Hochschild Mining. However, KEYBANK NATL ASSN is 5.42 times less risky than Hochschild Mining. It trades about -0.33 of its potential returns per unit of risk. Hochschild Mining PLC is currently generating about -0.06 per unit of risk. If you would invest  9,788  in KEYBANK NATL ASSN on October 8, 2024 and sell it today you would lose (319.00) from holding KEYBANK NATL ASSN or give up 3.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	78.95%
Values	Daily Returns

KEYBANK NATL ASSN  vs.  Hochschild Mining PLC

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.

Hochschild Mining PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hochschild Mining PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Hochschild Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KEYBANK and Hochschild Mining

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

The idea behind KEYBANK NATL ASSN and Hochschild Mining PLC 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.