Correlation Between KeyCorp and First Horizon
Can any of the company-specific risk be diversified away by investing in both KeyCorp and First Horizon 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 First Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and First Horizon National, you can compare the effects of market volatilities on KeyCorp and First Horizon 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 First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and First Horizon.
Diversification Opportunities for KeyCorp and First Horizon
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KeyCorp and First is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and First Horizon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon 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 First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon National has no effect on the direction of KeyCorp i.e., KeyCorp and First Horizon go up and down completely randomly.
Pair Corralation between KeyCorp and First Horizon
Considering the 90-day investment horizon KeyCorp is expected to generate 1.0 times more return on investment than First Horizon. However, KeyCorp is 1.0 times less risky than First Horizon. It trades about 0.12 of its potential returns per unit of risk. First Horizon National is currently generating about 0.1 per unit of risk. If you would invest 1,402 in KeyCorp on August 24, 2024 and sell it today you would earn a total of 520.00 from holding KeyCorp or generate 37.09% 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. First Horizon National
Performance |
| Timeline |
| KeyCorp |
| First Horizon National |
KeyCorp and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and First Horizon
The main advantage of trading using opposite KeyCorp and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.| KeyCorp vs. Western Alliance Bancorporation | KeyCorp vs. Comerica | KeyCorp vs. Truist Financial Corp | KeyCorp vs. Fifth Third Bancorp |
| First Horizon vs. Zions Bancorporation | First Horizon vs. KeyCorp | First Horizon vs. Comerica | First Horizon vs. Western Alliance Bancorporation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |