Correlation Between KeyCorp and Virginia National
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Virginia National 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 Virginia National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Virginia National Bankshares, you can compare the effects of market volatilities on KeyCorp and Virginia National 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 Virginia National. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Virginia National.
Diversification Opportunities for KeyCorp and Virginia National
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KeyCorp and Virginia is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Virginia National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virginia National 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 Virginia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virginia National has no effect on the direction of KeyCorp i.e., KeyCorp and Virginia National go up and down completely randomly.
Pair Corralation between KeyCorp and Virginia National
Assuming the 90 days trading horizon KeyCorp is expected to generate 3.25 times less return on investment than Virginia National. But when comparing it to its historical volatility, KeyCorp is 2.04 times less risky than Virginia National. It trades about 0.08 of its potential returns per unit of risk. Virginia National Bankshares is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,995 in Virginia National Bankshares on August 30, 2024 and sell it today you would earn a total of 195.00 from holding Virginia National Bankshares or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. Virginia National Bankshares
Performance |
| Timeline |
| KeyCorp |
| Virginia National |
KeyCorp and Virginia National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Virginia National
The main advantage of trading using opposite KeyCorp and Virginia National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Virginia National 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 Virginia National will offset losses from the drop in Virginia National's long position.| KeyCorp vs. KeyCorp | KeyCorp vs. Regions Financial | KeyCorp vs. US Bancorp | KeyCorp vs. Fifth Third Bancorp |
| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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