Correlation Between ASM Pacific and KEYCORP
Can any of the company-specific risk be diversified away by investing in both ASM Pacific 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 ASM Pacific and KEYCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASM Pacific Technology and KEYCORP, you can compare the effects of market volatilities on ASM Pacific 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 ASM Pacific with a short position of KEYCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM Pacific and KEYCORP.
Diversification Opportunities for ASM Pacific and KEYCORP
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASM and KEYCORP is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ASM Pacific Technology and KEYCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYCORP and ASM Pacific 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 ASM Pacific Technology 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 has no effect on the direction of ASM Pacific i.e., ASM Pacific and KEYCORP go up and down completely randomly.
Pair Corralation between ASM Pacific and KEYCORP
Assuming the 90 days trading horizon ASM Pacific is expected to generate 3.57 times less return on investment than KEYCORP. In addition to that, ASM Pacific is 2.03 times more volatile than KEYCORP. It trades about 0.01 of its total potential returns per unit of risk. KEYCORP is currently generating about 0.08 per unit of volatility. If you would invest 1,211 in KEYCORP on November 3, 2024 and sell it today you would earn a total of 510.00 from holding KEYCORP or generate 42.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASM Pacific Technology vs. KEYCORP
Performance |
| Timeline |
| ASM Pacific Technology |
| KEYCORP |
ASM Pacific and KEYCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM Pacific and KEYCORP
The main advantage of trading using opposite ASM Pacific and KEYCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM Pacific 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.| ASM Pacific vs. ASML HOLDING NY | ASM Pacific vs. ASML Holding NV | ASM Pacific vs. ASML Holding NV | ASM Pacific vs. Applied Materials |
| KEYCORP vs. PLANT VEDA FOODS | KEYCORP vs. SENECA FOODS A | KEYCORP vs. CAL MAINE FOODS | KEYCORP vs. Sekisui Chemical Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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