Correlation Between EON Resources and KeyCorp
Can any of the company-specific risk be diversified away by investing in both EON Resources 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 EON Resources and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EON Resources and KeyCorp, you can compare the effects of market volatilities on EON Resources 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 EON Resources with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EON Resources and KeyCorp.
Diversification Opportunities for EON Resources and KeyCorp
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EON and KeyCorp is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding EON Resources and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and EON Resources 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 EON Resources 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 EON Resources i.e., EON Resources and KeyCorp go up and down completely randomly.
Pair Corralation between EON Resources and KeyCorp
Given the investment horizon of 90 days EON Resources is expected to under-perform the KeyCorp. In addition to that, EON Resources is 7.4 times more volatile than KeyCorp. It trades about -0.27 of its total potential returns per unit of risk. KeyCorp is currently generating about -0.11 per unit of volatility. If you would invest 2,543 in KeyCorp on September 4, 2024 and sell it today you would lose (54.00) from holding KeyCorp or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EON Resources vs. KeyCorp
Performance |
| Timeline |
| EON Resources |
| KeyCorp |
EON Resources and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EON Resources and KeyCorp
The main advantage of trading using opposite EON Resources and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EON Resources 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.| EON Resources vs. KeyCorp | EON Resources vs. Glacier Bancorp | EON Resources vs. BCB Bancorp | EON Resources vs. Franklin Credit Management |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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