Correlation Between Chemours and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Chemours 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 Chemours and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and KeyCorp, you can compare the effects of market volatilities on Chemours 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 Chemours with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and KeyCorp.
Diversification Opportunities for Chemours and KeyCorp
Modest diversification
The 3 months correlation between Chemours and KeyCorp is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Chemours 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 Chemours Co 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 Chemours i.e., Chemours and KeyCorp go up and down completely randomly.
Pair Corralation between Chemours and KeyCorp
Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the KeyCorp. In addition to that, Chemours is 3.75 times more volatile than KeyCorp. It trades about -0.02 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.07 per unit of volatility. If you would invest 2,100 in KeyCorp on November 5, 2024 and sell it today you would earn a total of 361.00 from holding KeyCorp or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Chemours Co vs. KeyCorp
Performance |
| Timeline |
| Chemours |
| KeyCorp |
Chemours and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and KeyCorp
The main advantage of trading using opposite Chemours and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours 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.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
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.
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