Correlation Between KeyCorp and Blue Foundry
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Blue Foundry 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 Blue Foundry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Blue Foundry Bancorp, you can compare the effects of market volatilities on KeyCorp and Blue Foundry 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 Blue Foundry. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Blue Foundry.
Diversification Opportunities for KeyCorp and Blue Foundry
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KeyCorp and Blue is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Blue Foundry Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Foundry Bancorp 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 Blue Foundry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Foundry Bancorp has no effect on the direction of KeyCorp i.e., KeyCorp and Blue Foundry go up and down completely randomly.
Pair Corralation between KeyCorp and Blue Foundry
Assuming the 90 days trading horizon KeyCorp is expected to generate 0.74 times more return on investment than Blue Foundry. However, KeyCorp is 1.35 times less risky than Blue Foundry. It trades about 0.06 of its potential returns per unit of risk. Blue Foundry Bancorp is currently generating about -0.07 per unit of risk. If you would invest 2,142 in KeyCorp on December 6, 2024 and sell it today you would earn a total of 26.00 from holding KeyCorp or generate 1.21% 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. Blue Foundry Bancorp
Performance |
| Timeline |
| KeyCorp |
| Blue Foundry Bancorp |
KeyCorp and Blue Foundry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Blue Foundry
The main advantage of trading using opposite KeyCorp and Blue Foundry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Blue Foundry 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 Blue Foundry will offset losses from the drop in Blue Foundry's long position.The idea behind KeyCorp and Blue Foundry Bancorp 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.| Blue Foundry vs. Home Federal Bancorp | ||
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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