Correlation Between KeyCorp and CVB Financial
Can any of the company-specific risk be diversified away by investing in both KeyCorp and CVB 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 CVB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and CVB Financial, you can compare the effects of market volatilities on KeyCorp and CVB 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 CVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and CVB Financial.
Diversification Opportunities for KeyCorp and CVB Financial
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KeyCorp and CVB is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and CVB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB 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 CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial has no effect on the direction of KeyCorp i.e., KeyCorp and CVB Financial go up and down completely randomly.
Pair Corralation between KeyCorp and CVB Financial
Considering the 90-day investment horizon KeyCorp is expected to generate 1.12 times more return on investment than CVB Financial. However, KeyCorp is 1.12 times more volatile than CVB Financial. It trades about 0.03 of its potential returns per unit of risk. CVB Financial is currently generating about 0.01 per unit of risk. If you would invest 1,539 in KeyCorp on August 27, 2024 and sell it today you would earn a total of 421.00 from holding KeyCorp or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. CVB Financial
Performance |
| Timeline |
| KeyCorp |
| CVB Financial |
KeyCorp and CVB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and CVB Financial
The main advantage of trading using opposite KeyCorp and CVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, CVB 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 CVB Financial will offset losses from the drop in CVB Financial's long position.| KeyCorp vs. Western Alliance Bancorporation | KeyCorp vs. Comerica | KeyCorp vs. Truist Financial Corp | KeyCorp vs. Fifth Third Bancorp |
| CVB Financial vs. First Interstate BancSystem | CVB Financial vs. First Financial Bankshares | CVB Financial vs. Independent Bank Group | CVB Financial vs. Eagle Bancorp Montana |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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