Correlation Between KeyCorp and Lendingtree
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Lendingtree 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 Lendingtree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Lendingtree, you can compare the effects of market volatilities on KeyCorp and Lendingtree 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 Lendingtree. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Lendingtree.
Diversification Opportunities for KeyCorp and Lendingtree
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KeyCorp and Lendingtree is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Lendingtree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendingtree 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 Lendingtree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendingtree has no effect on the direction of KeyCorp i.e., KeyCorp and Lendingtree go up and down completely randomly.
Pair Corralation between KeyCorp and Lendingtree
Assuming the 90 days trading horizon KeyCorp is expected to generate 0.2 times more return on investment than Lendingtree. However, KeyCorp is 4.89 times less risky than Lendingtree. It trades about 0.09 of its potential returns per unit of risk. Lendingtree is currently generating about 0.0 per unit of risk. If you would invest 2,300 in KeyCorp on September 3, 2024 and sell it today you would earn a total of 266.00 from holding KeyCorp or generate 11.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. Lendingtree
Performance |
| Timeline |
| KeyCorp |
| Lendingtree |
KeyCorp and Lendingtree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Lendingtree
The main advantage of trading using opposite KeyCorp and Lendingtree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Lendingtree 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 Lendingtree will offset losses from the drop in Lendingtree's long position.The idea behind KeyCorp and Lendingtree 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.| Lendingtree vs. Voya Financial | Lendingtree vs. B Riley Financial | Lendingtree vs. Voya Financial | Lendingtree vs. B Riley Financial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |