Correlation Between Viemed Healthcare and KEYCORP

Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare and KEYCORP 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 Viemed Healthcare and KEYCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Viemed Healthcare and KEYCORP MTN, you can compare the effects of market volatilities on Viemed Healthcare and KEYCORP 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 Viemed Healthcare with a short position of KEYCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and KEYCORP.

Diversification Opportunities for Viemed Healthcare and KEYCORP

0.21

Correlation Coefficient

Viemed Healthcare  KEYCORP

Modest diversification

The 3 months correlation between Viemed and KEYCORP is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and KEYCORP MTN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYCORP MTN and Viemed Healthcare 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 Viemed Healthcare are associated (or correlated) with KEYCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYCORP MTN has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and KEYCORP go up and down completely randomly.

Pair Corralation between Viemed Healthcare and KEYCORP

Considering the 90-day investment horizon Viemed Healthcare is expected to generate 1.21 times more return on investment than KEYCORP. However, Viemed Healthcare is 1.21 times more volatile than KEYCORP MTN. It trades about -0.16 of its potential returns per unit of risk. KEYCORP MTN is currently generating about -0.28 per unit of risk. If you would invest  861.00  in Viemed Healthcare on October 8, 2024 and sell it today you would lose (49.00) from holding Viemed Healthcare or give up 5.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Viemed Healthcare  vs.  KEYCORP MTN

Viemed Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Viemed Healthcare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

KEYCORP MTN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEYCORP MTN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KEYCORP MTN investors.

Pair Trading with Viemed Healthcare and KEYCORP

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

The idea behind Viemed Healthcare and KEYCORP MTN 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.