Correlation Between NEL ASA and KeyCorp
Can any of the company-specific risk be diversified away by investing in both NEL ASA 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 NEL ASA and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEL ASA ADR30 and KeyCorp, you can compare the effects of market volatilities on NEL ASA 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 NEL ASA with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEL ASA and KeyCorp.
Diversification Opportunities for NEL ASA and KeyCorp
Very good diversification
The 3 months correlation between NEL and KeyCorp is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NEL ASA ADR30 and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and NEL ASA 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 NEL ASA ADR30 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 NEL ASA i.e., NEL ASA and KeyCorp go up and down completely randomly.
Pair Corralation between NEL ASA and KeyCorp
Assuming the 90 days trading horizon NEL ASA ADR30 is expected to under-perform the KeyCorp. In addition to that, NEL ASA is 1.14 times more volatile than KeyCorp. It trades about -0.18 of its total potential returns per unit of risk. KeyCorp is currently generating about -0.1 per unit of volatility. If you would invest 1,396 in KeyCorp on January 13, 2025 and sell it today you would lose (175.00) from holding KeyCorp or give up 12.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEL ASA ADR30 vs. KeyCorp
Performance |
| Timeline |
| NEL ASA ADR30 |
| KeyCorp |
NEL ASA and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEL ASA and KeyCorp
The main advantage of trading using opposite NEL ASA and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEL ASA 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.| NEL ASA vs. SIEMENS AG SP | NEL ASA vs. Siemens Aktiengesellschaft | NEL ASA vs. Siemens Aktiengesellschaft | NEL ASA vs. Schneider Electric SE |
| KeyCorp vs. US Bancorp | KeyCorp vs. The PNC Financial | KeyCorp vs. Fifth Third Bancorp | KeyCorp vs. MT Bank Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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