Correlation Between KEYBANK and Stepan
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By analyzing existing cross correlation between KEYBANK NATL ASSN and Stepan Company, you can compare the effects of market volatilities on KEYBANK and Stepan 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 Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEYBANK and Stepan.
Diversification Opportunities for KEYBANK and Stepan
Modest diversification
The 3 months correlation between KEYBANK and Stepan is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding KEYBANK NATL ASSN and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company 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 Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of KEYBANK i.e., KEYBANK and Stepan go up and down completely randomly.
Pair Corralation between KEYBANK and Stepan
Assuming the 90 days trading horizon KEYBANK NATL ASSN is expected to generate 0.24 times more return on investment than Stepan. However, KEYBANK NATL ASSN is 4.21 times less risky than Stepan. It trades about -0.15 of its potential returns per unit of risk. Stepan Company is currently generating about -0.09 per unit of risk. If you would invest 9,774 in KEYBANK NATL ASSN on September 25, 2024 and sell it today you would lose (228.00) from holding KEYBANK NATL ASSN or give up 2.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 54.69% |
Values | Daily Returns |
KEYBANK NATL ASSN vs. Stepan Company
Performance |
Timeline |
KEYBANK NATL ASSN |
Stepan Company |
KEYBANK and Stepan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KEYBANK and Stepan
The main advantage of trading using opposite KEYBANK and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEYBANK position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan's long position.KEYBANK vs. QBE Insurance Group | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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