Correlation Between KeyCorp and BOK Financial
Can any of the company-specific risk be diversified away by investing in both KeyCorp and BOK 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 BOK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and BOK Financial, you can compare the effects of market volatilities on KeyCorp and BOK 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 BOK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and BOK Financial.
Diversification Opportunities for KeyCorp and BOK Financial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KeyCorp and BOK is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and BOK Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOK 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 BOK Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOK Financial has no effect on the direction of KeyCorp i.e., KeyCorp and BOK Financial go up and down completely randomly.
Pair Corralation between KeyCorp and BOK Financial
Assuming the 90 days trading horizon KeyCorp is expected to generate 9.03 times less return on investment than BOK Financial. But when comparing it to its historical volatility, KeyCorp is 3.13 times less risky than BOK Financial. It trades about 0.07 of its potential returns per unit of risk. BOK Financial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 10,734 in BOK Financial on August 31, 2024 and sell it today you would earn a total of 1,229 from holding BOK Financial or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. BOK Financial
Performance |
| Timeline |
| KeyCorp |
| BOK Financial |
KeyCorp and BOK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and BOK Financial
The main advantage of trading using opposite KeyCorp and BOK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, BOK 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 BOK Financial will offset losses from the drop in BOK Financial's long position.| KeyCorp vs. KeyCorp | KeyCorp vs. KeyCorp | KeyCorp vs. Fifth Third Bancorp | KeyCorp vs. Citizens Financial Group |
| BOK Financial vs. First Financial Bankshares | BOK Financial vs. Auburn National Bancorporation | BOK Financial vs. Great Southern Bancorp | BOK Financial vs. First Guaranty Bancshares |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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