Correlation Between Bank First and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Bank First 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 Bank First and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank First National and KeyCorp, you can compare the effects of market volatilities on Bank First 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 Bank First with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank First and KeyCorp.
Diversification Opportunities for Bank First and KeyCorp
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and KeyCorp is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Bank First National and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Bank First 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 Bank First National 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 Bank First i.e., Bank First and KeyCorp go up and down completely randomly.
Pair Corralation between Bank First and KeyCorp
Considering the 90-day investment horizon Bank First National is expected to generate 0.99 times more return on investment than KeyCorp. However, Bank First National is 1.01 times less risky than KeyCorp. It trades about 0.19 of its potential returns per unit of risk. KeyCorp is currently generating about 0.16 per unit of risk. If you would invest 9,300 in Bank First National on August 29, 2024 and sell it today you would earn a total of 1,328 from holding Bank First National or generate 14.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank First National vs. KeyCorp
Performance |
| Timeline |
| Bank First National |
| KeyCorp |
Bank First and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank First and KeyCorp
The main advantage of trading using opposite Bank First and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank First 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.| Bank First vs. Fifth Third Bancorp | Bank First vs. Huntington Bancshares Incorporated | Bank First vs. MT Bank |
| KeyCorp vs. Western Alliance Bancorporation | KeyCorp vs. Comerica | KeyCorp vs. Truist Financial Corp | KeyCorp vs. Fifth Third Bancorp |
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 Stocks Directory module to find actively traded stocks across global markets.
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