Correlation Between KeyCorp and LOWES
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By analyzing existing cross correlation between KeyCorp and LOWES INC 31, you can compare the effects of market volatilities on KeyCorp and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and LOWES.
Diversification Opportunities for KeyCorp and LOWES
Average diversification
The 3 months correlation between KeyCorp and LOWES is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and LOWES INC 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 31 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 31 has no effect on the direction of KeyCorp i.e., KeyCorp and LOWES go up and down completely randomly.
Pair Corralation between KeyCorp and LOWES
Assuming the 90 days trading horizon KeyCorp is expected to generate 6.84 times more return on investment than LOWES. However, KeyCorp is 6.84 times more volatile than LOWES INC 31. It trades about 0.33 of its potential returns per unit of risk. LOWES INC 31 is currently generating about 0.06 per unit of risk. If you would invest 2,378 in KeyCorp on October 25, 2024 and sell it today you would earn a total of 144.00 from holding KeyCorp or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
KeyCorp vs. LOWES INC 31
Performance |
| Timeline |
| KeyCorp |
| LOWES INC 31 |
KeyCorp and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and LOWES
The main advantage of trading using opposite KeyCorp and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.The idea behind KeyCorp and LOWES INC 31 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.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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