Correlation Between KeyCorp and Malaga Financial
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Malaga Financial 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 Malaga Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Malaga Financial, you can compare the effects of market volatilities on KeyCorp and Malaga Financial 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 Malaga Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Malaga Financial.
Diversification Opportunities for KeyCorp and Malaga Financial
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KeyCorp and Malaga is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Malaga Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaga Financial 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 Malaga Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaga Financial has no effect on the direction of KeyCorp i.e., KeyCorp and Malaga Financial go up and down completely randomly.
Pair Corralation between KeyCorp and Malaga Financial
Assuming the 90 days trading horizon KeyCorp is expected to under-perform the Malaga Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, KeyCorp is 1.84 times less risky than Malaga Financial. The preferred stock trades about -0.11 of its potential returns per unit of risk. The Malaga Financial is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,120 in Malaga Financial on November 27, 2024 and sell it today you would lose (27.00) from holding Malaga Financial or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. Malaga Financial
Performance |
| Timeline |
| KeyCorp |
| Malaga Financial |
KeyCorp and Malaga Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Malaga Financial
The main advantage of trading using opposite KeyCorp and Malaga Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Malaga Financial 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 Malaga Financial will offset losses from the drop in Malaga Financial's long position.The idea behind KeyCorp and Malaga Financial 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.| Malaga Financial vs. MF Bancorp | Malaga Financial vs. United Bancorporation of | Malaga Financial vs. Harbor Bankshares | Malaga Financial vs. BankFirst Capital |
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 CEOs Directory module to screen CEOs from public companies around the world.
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