Correlation Between Banco Macro and KeyCorp

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Can any of the company-specific risk be diversified away by investing in both Banco Macro 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 Banco Macro and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Macro SA and KeyCorp, you can compare the effects of market volatilities on Banco Macro 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 Banco Macro with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Macro and KeyCorp.

Diversification Opportunities for Banco Macro and KeyCorp

BancoKeyCorpDiversified AwayBancoKeyCorpDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Banco and KeyCorp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banco Macro SA and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Banco Macro 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 Banco Macro SA 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 Banco Macro i.e., Banco Macro and KeyCorp go up and down completely randomly.

Pair Corralation between Banco Macro and KeyCorp

Considering the 90-day investment horizon Banco Macro SA is expected to under-perform the KeyCorp. In addition to that, Banco Macro is 5.82 times more volatile than KeyCorp. It trades about -0.3 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.0 per unit of volatility. If you would invest  2,513  in KeyCorp on November 30, 2024 and sell it today you would lose (1.00) from holding KeyCorp or give up 0.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Banco Macro SA  vs.  KeyCorp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 010203040
JavaScript chart by amCharts 3.21.15BMA KEY-PI
       Timeline  
Banco Macro SA 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Banco Macro SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Banco Macro is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb80859095100105110115
KeyCorp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, KeyCorp is not utilizing all of its potentials. The new stock price confusion, may contribute to short-horizon losses for the traders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb23.52424.52525.5

Banco Macro and KeyCorp Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.47-10.09-6.71-3.320.043.296.710.113.5116.91 0.10.20.30.40.5
JavaScript chart by amCharts 3.21.15BMA KEY-PI
       Returns  

Pair Trading with Banco Macro and KeyCorp

The main advantage of trading using opposite Banco Macro and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Macro 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 Banco Macro SA and KeyCorp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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