Correlation Between CF Bankshares and KeyCorp
Can any of the company-specific risk be diversified away by investing in both CF Bankshares 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 CF Bankshares and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Bankshares and KeyCorp, you can compare the effects of market volatilities on CF Bankshares 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 CF Bankshares with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Bankshares and KeyCorp.
Diversification Opportunities for CF Bankshares and KeyCorp
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CFBK and KeyCorp is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding CF Bankshares and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and CF Bankshares 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 CF Bankshares 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 CF Bankshares i.e., CF Bankshares and KeyCorp go up and down completely randomly.
Pair Corralation between CF Bankshares and KeyCorp
Given the investment horizon of 90 days CF Bankshares is expected to generate 1.02 times more return on investment than KeyCorp. However, CF Bankshares is 1.02 times more volatile than KeyCorp. It trades about 0.19 of its potential returns per unit of risk. KeyCorp is currently generating about 0.11 per unit of risk. If you would invest 2,130 in CF Bankshares on September 2, 2024 and sell it today you would earn a total of 692.00 from holding CF Bankshares or generate 32.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Bankshares vs. KeyCorp
Performance |
| Timeline |
| CF Bankshares |
| KeyCorp |
CF Bankshares and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Bankshares and KeyCorp
The main advantage of trading using opposite CF Bankshares and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Bankshares 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.| CF Bankshares vs. Affinity Bancshares | CF Bankshares vs. Auburn National Bancorporation | CF Bankshares vs. First Community | CF Bankshares vs. LINKBANCORP |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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