Correlation Between KeyCorp and Civista Bancshares
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Civista Bancshares 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 Civista Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Civista Bancshares, you can compare the effects of market volatilities on KeyCorp and Civista Bancshares 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 Civista Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Civista Bancshares.
Diversification Opportunities for KeyCorp and Civista Bancshares
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KeyCorp and Civista is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Civista Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civista Bancshares 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 Civista Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civista Bancshares has no effect on the direction of KeyCorp i.e., KeyCorp and Civista Bancshares go up and down completely randomly.
Pair Corralation between KeyCorp and Civista Bancshares
Assuming the 90 days trading horizon KeyCorp is expected to generate 12.7 times less return on investment than Civista Bancshares. But when comparing it to its historical volatility, KeyCorp is 3.42 times less risky than Civista Bancshares. It trades about 0.12 of its potential returns per unit of risk. Civista Bancshares is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 1,835 in Civista Bancshares on August 27, 2024 and sell it today you would earn a total of 488.00 from holding Civista Bancshares or generate 26.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. Civista Bancshares
Performance |
| Timeline |
| KeyCorp |
| Civista Bancshares |
KeyCorp and Civista Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Civista Bancshares
The main advantage of trading using opposite KeyCorp and Civista Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Civista Bancshares 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 Civista Bancshares will offset losses from the drop in Civista Bancshares' long position.| KeyCorp vs. KeyCorp | KeyCorp vs. Regions Financial | KeyCorp vs. US Bancorp | KeyCorp vs. Fifth Third Bancorp |
| Civista Bancshares vs. Fifth Third Bancorp | Civista Bancshares vs. Zions Bancorporation | Civista Bancshares vs. Huntington Bancshares Incorporated | Civista Bancshares vs. Comerica |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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