Correlation Between Chiba Bank and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Chiba Bank 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 Chiba Bank and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank Ltd and KeyCorp, you can compare the effects of market volatilities on Chiba Bank 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 Chiba Bank with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and KeyCorp.
Diversification Opportunities for Chiba Bank and KeyCorp
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chiba and KeyCorp is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank Ltd and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Chiba Bank 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 Chiba Bank Ltd 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 Chiba Bank i.e., Chiba Bank and KeyCorp go up and down completely randomly.
Pair Corralation between Chiba Bank and KeyCorp
Assuming the 90 days horizon Chiba Bank is expected to generate 1.19 times less return on investment than KeyCorp. In addition to that, Chiba Bank is 1.3 times more volatile than KeyCorp. It trades about 0.03 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.05 per unit of volatility. If you would invest 2,449 in KeyCorp on August 28, 2024 and sell it today you would earn a total of 55.00 from holding KeyCorp or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiba Bank Ltd vs. KeyCorp
Performance |
| Timeline |
| Chiba Bank |
| KeyCorp |
Chiba Bank and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and KeyCorp
The main advantage of trading using opposite Chiba Bank and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank 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.| Chiba Bank vs. First Hawaiian | Chiba Bank vs. Central Pacific Financial | Chiba Bank vs. Territorial Bancorp | Chiba Bank vs. Comerica |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stocks Directory Find actively traded stocks across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |