Correlation Between KeyCorp and Broadway Financial
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Broadway 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 Broadway Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Broadway Financial, you can compare the effects of market volatilities on KeyCorp and Broadway 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 Broadway Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Broadway Financial.
Diversification Opportunities for KeyCorp and Broadway Financial
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KeyCorp and Broadway is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Broadway Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadway 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 Broadway Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadway Financial has no effect on the direction of KeyCorp i.e., KeyCorp and Broadway Financial go up and down completely randomly.
Pair Corralation between KeyCorp and Broadway Financial
Assuming the 90 days trading horizon KeyCorp is expected to under-perform the Broadway Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, KeyCorp is 2.54 times less risky than Broadway Financial. The preferred stock trades about -0.07 of its potential returns per unit of risk. The Broadway Financial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 686.00 in Broadway Financial on November 2, 2024 and sell it today you would earn a total of 84.00 from holding Broadway Financial or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. Broadway Financial
Performance |
| Timeline |
| KeyCorp |
| Broadway Financial |
KeyCorp and Broadway Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Broadway Financial
The main advantage of trading using opposite KeyCorp and Broadway Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Broadway 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 Broadway Financial will offset losses from the drop in Broadway Financial's long position.| KeyCorp vs. KeyCorp | KeyCorp vs. Regions Financial | KeyCorp vs. US Bancorp | KeyCorp vs. Fifth Third Bancorp |
| Broadway Financial vs. Community West Bancshares | Broadway Financial vs. First Northwest Bancorp | Broadway Financial vs. First Financial Northwest | Broadway Financial vs. First Capital |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |