Correlation Between KeyCorp and Atlantic Union

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Can any of the company-specific risk be diversified away by investing in both KeyCorp and Atlantic Union 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 Atlantic Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Atlantic Union Bankshares, you can compare the effects of market volatilities on KeyCorp and Atlantic Union 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 Atlantic Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Atlantic Union.

Diversification Opportunities for KeyCorp and Atlantic Union

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between KeyCorp and Atlantic is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Atlantic Union Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Union Bankshares 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 Atlantic Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Union Bankshares has no effect on the direction of KeyCorp i.e., KeyCorp and Atlantic Union go up and down completely randomly.

Pair Corralation between KeyCorp and Atlantic Union

Considering the 90-day investment horizon KeyCorp is expected to generate 1.27 times more return on investment than Atlantic Union. However, KeyCorp is 1.27 times more volatile than Atlantic Union Bankshares. It trades about 0.03 of its potential returns per unit of risk. Atlantic Union Bankshares is currently generating about 0.03 per unit of risk. If you would invest  1,631  in KeyCorp on August 31, 2024 and sell it today you would earn a total of  317.00  from holding KeyCorp or generate 19.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.79%
ValuesDaily Returns

KeyCorp  vs.  Atlantic Union Bankshares

 Performance 
       Timeline  
KeyCorp 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, KeyCorp showed solid returns over the last few months and may actually be approaching a breakup point.
Atlantic Union Bankshares 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Union Bankshares are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Atlantic Union may actually be approaching a critical reversion point that can send shares even higher in December 2024.

KeyCorp and Atlantic Union Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KeyCorp and Atlantic Union

The main advantage of trading using opposite KeyCorp and Atlantic Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Atlantic Union 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 Atlantic Union will offset losses from the drop in Atlantic Union's long position.
The idea behind KeyCorp and Atlantic Union Bankshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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