Correlation Between KeyCorp and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both KeyCorp and NYSE Composite 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 NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and NYSE Composite, you can compare the effects of market volatilities on KeyCorp and NYSE Composite 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 NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and NYSE Composite.
Diversification Opportunities for KeyCorp and NYSE Composite
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between KeyCorp and NYSE is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite 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 NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of KeyCorp i.e., KeyCorp and NYSE Composite go up and down completely randomly.
Pair Corralation between KeyCorp and NYSE Composite
Assuming the 90 days trading horizon KeyCorp is expected to under-perform the NYSE Composite. In addition to that, KeyCorp is 1.91 times more volatile than NYSE Composite. It trades about -0.07 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.04 per unit of volatility. If you would invest 1,985,329 in NYSE Composite on September 13, 2024 and sell it today you would lose (8,420) from holding NYSE Composite or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. NYSE Composite
Performance |
| Timeline |
KeyCorp and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
KeyCorp
Pair trading matchups for KeyCorp
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with KeyCorp and NYSE Composite
The main advantage of trading using opposite KeyCorp and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.The idea behind KeyCorp and NYSE Composite 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.| NYSE Composite vs. Air Products and | NYSE Composite vs. Allient | NYSE Composite vs. Ecovyst | NYSE Composite vs. CTS Corporation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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