Correlation Between KeyCorp and CullenFrost Bankers
Can any of the company-specific risk be diversified away by investing in both KeyCorp and CullenFrost Bankers 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 CullenFrost Bankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and CullenFrost Bankers, you can compare the effects of market volatilities on KeyCorp and CullenFrost Bankers 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 CullenFrost Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and CullenFrost Bankers.
Diversification Opportunities for KeyCorp and CullenFrost Bankers
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KeyCorp and CullenFrost is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and CullenFrost Bankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CullenFrost Bankers 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 CullenFrost Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CullenFrost Bankers has no effect on the direction of KeyCorp i.e., KeyCorp and CullenFrost Bankers go up and down completely randomly.
Pair Corralation between KeyCorp and CullenFrost Bankers
Assuming the 90 days trading horizon KeyCorp is expected to generate 1.06 times more return on investment than CullenFrost Bankers. However, KeyCorp is 1.06 times more volatile than CullenFrost Bankers. It trades about 0.16 of its potential returns per unit of risk. CullenFrost Bankers is currently generating about 0.08 per unit of risk. If you would invest 1,982 in KeyCorp on August 26, 2024 and sell it today you would earn a total of 391.00 from holding KeyCorp or generate 19.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. CullenFrost Bankers
Performance |
| Timeline |
| KeyCorp |
| CullenFrost Bankers |
KeyCorp and CullenFrost Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and CullenFrost Bankers
The main advantage of trading using opposite KeyCorp and CullenFrost Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, CullenFrost Bankers 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 CullenFrost Bankers will offset losses from the drop in CullenFrost Bankers' long position.| KeyCorp vs. KeyCorp | KeyCorp vs. Regions Financial | KeyCorp vs. US Bancorp | KeyCorp vs. Fifth Third Bancorp |
| CullenFrost Bankers vs. Morgan Stanley | CullenFrost Bankers vs. KeyCorp | CullenFrost Bankers vs. KeyCorp | CullenFrost Bankers vs. KeyCorp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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