Correlation Between Bank of Hawaii and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Bank of Hawaii 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 of Hawaii and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Hawaii and KeyCorp, you can compare the effects of market volatilities on Bank of Hawaii 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 of Hawaii with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Hawaii and KeyCorp.
Diversification Opportunities for Bank of Hawaii and KeyCorp
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and KeyCorp is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Hawaii and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Bank of Hawaii 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 of Hawaii 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 of Hawaii i.e., Bank of Hawaii and KeyCorp go up and down completely randomly.
Pair Corralation between Bank of Hawaii and KeyCorp
Assuming the 90 days trading horizon Bank of Hawaii is expected to generate 0.71 times more return on investment than KeyCorp. However, Bank of Hawaii is 1.41 times less risky than KeyCorp. It trades about 0.25 of its potential returns per unit of risk. KeyCorp is currently generating about 0.09 per unit of risk. If you would invest 1,540 in Bank of Hawaii on October 28, 2024 and sell it today you would earn a total of 98.00 from holding Bank of Hawaii or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Hawaii vs. KeyCorp
Performance |
| Timeline |
| Bank of Hawaii |
| KeyCorp |
Bank of Hawaii and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Hawaii and KeyCorp
The main advantage of trading using opposite Bank of Hawaii and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Hawaii 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 of Hawaii vs. CullenFrost Bankers | Bank of Hawaii vs. Citizens Financial Group | Bank of Hawaii vs. Cadence Bank | Bank of Hawaii vs. Truist Financial |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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