Correlation Between KEYBANK and Integral

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

Diversification Opportunities for KEYBANK and Integral

0.28

Correlation Coefficient

KEYBANK  Integral

Modest diversification

The 3 months correlation between KEYBANK and Integral is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding KEYBANK NATL ASSN and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of KEYBANK i.e., KEYBANK and Integral go up and down completely randomly.

Pair Corralation between KEYBANK and Integral

Assuming the 90 days trading horizon KEYBANK is expected to generate 28.55 times less return on investment than Integral. But when comparing it to its historical volatility, KEYBANK NATL ASSN is 4.5 times less risky than Integral. It trades about 0.0 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  944.00  in Integral Ad Science on September 28, 2024 and sell it today you would earn a total of  98.00  from holding Integral Ad Science or generate 10.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	58.06%
Values	Daily Returns

KEYBANK NATL ASSN  vs.  Integral Ad Science

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 newest stock price disturbance, may contribute to short-term losses for the investors.

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with KEYBANK and Integral

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

The idea behind KEYBANK NATL ASSN and Integral Ad Science 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.