Correlation Between CAVA Group, and KeyCorp
Can any of the company-specific risk be diversified away by investing in both CAVA Group, 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 CAVA Group, and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAVA Group, and KeyCorp, you can compare the effects of market volatilities on CAVA Group, 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 CAVA Group, with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and KeyCorp.
Diversification Opportunities for CAVA Group, and KeyCorp
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CAVA and KeyCorp is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and CAVA Group, 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 CAVA Group, 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 CAVA Group, i.e., CAVA Group, and KeyCorp go up and down completely randomly.
Pair Corralation between CAVA Group, and KeyCorp
Given the investment horizon of 90 days CAVA Group, is expected to generate 2.27 times more return on investment than KeyCorp. However, CAVA Group, is 2.27 times more volatile than KeyCorp. It trades about 0.19 of its potential returns per unit of risk. KeyCorp is currently generating about 0.05 per unit of risk. If you would invest 11,397 in CAVA Group, on September 4, 2024 and sell it today you would earn a total of 2,787 from holding CAVA Group, or generate 24.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAVA Group, vs. KeyCorp
Performance |
| Timeline |
| CAVA Group, |
| KeyCorp |
CAVA Group, and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAVA Group, and KeyCorp
The main advantage of trading using opposite CAVA Group, and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAVA Group, 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.| CAVA Group, vs. Tencent Music Entertainment | CAVA Group, vs. Asbury Automotive Group | CAVA Group, vs. Stagwell | CAVA Group, vs. Fluent Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |