Correlation Between KeyCorp and Euronav NV
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Euronav NV 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 KeyCorp and Euronav NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Euronav NV, you can compare the effects of market volatilities on KeyCorp and Euronav NV 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 KeyCorp with a short position of Euronav NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Euronav NV.
Diversification Opportunities for KeyCorp and Euronav NV
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KeyCorp and Euronav is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Euronav NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronav NV and KeyCorp 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 KeyCorp are associated (or correlated) with Euronav NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronav NV has no effect on the direction of KeyCorp i.e., KeyCorp and Euronav NV go up and down completely randomly.
Pair Corralation between KeyCorp and Euronav NV
Assuming the 90 days trading horizon KeyCorp is expected to generate 0.43 times more return on investment than Euronav NV. However, KeyCorp is 2.33 times less risky than Euronav NV. It trades about 0.06 of its potential returns per unit of risk. Euronav NV is currently generating about -0.11 per unit of risk. If you would invest 2,315 in KeyCorp on September 5, 2024 and sell it today you would earn a total of 146.00 from holding KeyCorp or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. Euronav NV
Performance |
| Timeline |
| KeyCorp |
| Euronav NV |
KeyCorp and Euronav NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Euronav NV
The main advantage of trading using opposite KeyCorp and Euronav NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Euronav NV 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 Euronav NV will offset losses from the drop in Euronav NV's long position.The idea behind KeyCorp and Euronav NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Euronav NV vs. Beyond Meat | Euronav NV vs. Lifevantage | Euronav NV vs. Commonwealth Bank of | Euronav NV vs. KeyCorp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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