Correlation Between FineMark Holdings and KeyCorp
Can any of the company-specific risk be diversified away by investing in both FineMark Holdings 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 FineMark Holdings and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FineMark Holdings and KeyCorp, you can compare the effects of market volatilities on FineMark Holdings 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 FineMark Holdings with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FineMark Holdings and KeyCorp.
Diversification Opportunities for FineMark Holdings and KeyCorp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FineMark and KeyCorp is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding FineMark Holdings and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and FineMark Holdings 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 FineMark Holdings 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 FineMark Holdings i.e., FineMark Holdings and KeyCorp go up and down completely randomly.
Pair Corralation between FineMark Holdings and KeyCorp
Given the investment horizon of 90 days FineMark Holdings is expected to generate 0.24 times more return on investment than KeyCorp. However, FineMark Holdings is 4.08 times less risky than KeyCorp. It trades about -0.06 of its potential returns per unit of risk. KeyCorp is currently generating about -0.09 per unit of risk. If you would invest 2,732 in FineMark Holdings on December 3, 2024 and sell it today you would lose (42.00) from holding FineMark Holdings or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.36% |
| Values | Daily Returns |
FineMark Holdings vs. KeyCorp
Performance |
| Timeline |
| FineMark Holdings |
| KeyCorp |
FineMark Holdings and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FineMark Holdings and KeyCorp
The main advantage of trading using opposite FineMark Holdings and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FineMark Holdings 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.| FineMark Holdings vs. Huntington Bancshares Incorporated | ||
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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