Correlation Between Finward Bancorp and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp 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 Finward Bancorp and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and KeyCorp, you can compare the effects of market volatilities on Finward Bancorp 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 Finward Bancorp with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and KeyCorp.
Diversification Opportunities for Finward Bancorp and KeyCorp
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Finward and KeyCorp is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Finward Bancorp 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 Finward Bancorp 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 Finward Bancorp i.e., Finward Bancorp and KeyCorp go up and down completely randomly.
Pair Corralation between Finward Bancorp and KeyCorp
Given the investment horizon of 90 days Finward Bancorp is expected to generate 1.92 times more return on investment than KeyCorp. However, Finward Bancorp is 1.92 times more volatile than KeyCorp. It trades about 0.13 of its potential returns per unit of risk. KeyCorp is currently generating about 0.04 per unit of risk. If you would invest 2,439 in Finward Bancorp on August 30, 2024 and sell it today you would earn a total of 652.00 from holding Finward Bancorp or generate 26.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finward Bancorp vs. KeyCorp
Performance |
| Timeline |
| Finward Bancorp |
| KeyCorp |
Finward Bancorp and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and KeyCorp
The main advantage of trading using opposite Finward Bancorp and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp 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.| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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