Correlation Between KeyCorp and Companhia Paranaense
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Companhia Paranaense 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 Companhia Paranaense into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Companhia Paranaense de, you can compare the effects of market volatilities on KeyCorp and Companhia Paranaense 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 Companhia Paranaense. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Companhia Paranaense.
Diversification Opportunities for KeyCorp and Companhia Paranaense
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between KeyCorp and Companhia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Companhia Paranaense de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Paranaense 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 Companhia Paranaense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Paranaense has no effect on the direction of KeyCorp i.e., KeyCorp and Companhia Paranaense go up and down completely randomly.
Pair Corralation between KeyCorp and Companhia Paranaense
Assuming the 90 days trading horizon KeyCorp is expected to generate 0.69 times more return on investment than Companhia Paranaense. However, KeyCorp is 1.45 times less risky than Companhia Paranaense. It trades about 0.08 of its potential returns per unit of risk. Companhia Paranaense de is currently generating about -0.04 per unit of risk. If you would invest 1,592 in KeyCorp on August 31, 2024 and sell it today you would earn a total of 903.00 from holding KeyCorp or generate 56.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.88% |
| Values | Daily Returns |
KeyCorp vs. Companhia Paranaense de
Performance |
| Timeline |
| KeyCorp |
| Companhia Paranaense |
KeyCorp and Companhia Paranaense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Companhia Paranaense
The main advantage of trading using opposite KeyCorp and Companhia Paranaense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Companhia Paranaense 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 Companhia Paranaense will offset losses from the drop in Companhia Paranaense's long position.The idea behind KeyCorp and Companhia Paranaense de 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.| Companhia Paranaense vs. CT Real Estate | Companhia Paranaense vs. Montauk Renewables | Companhia Paranaense vs. Encore Capital Group | Companhia Paranaense 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |