Correlation Between KeyCorp and FVCBankcorp
Can any of the company-specific risk be diversified away by investing in both KeyCorp and FVCBankcorp 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 FVCBankcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and FVCBankcorp, you can compare the effects of market volatilities on KeyCorp and FVCBankcorp 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 FVCBankcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and FVCBankcorp.
Diversification Opportunities for KeyCorp and FVCBankcorp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KeyCorp and FVCBankcorp is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and FVCBankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FVCBankcorp 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 FVCBankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FVCBankcorp has no effect on the direction of KeyCorp i.e., KeyCorp and FVCBankcorp go up and down completely randomly.
Pair Corralation between KeyCorp and FVCBankcorp
Considering the 90-day investment horizon KeyCorp is expected to generate 1.52 times more return on investment than FVCBankcorp. However, KeyCorp is 1.52 times more volatile than FVCBankcorp. It trades about 0.15 of its potential returns per unit of risk. FVCBankcorp is currently generating about 0.14 per unit of risk. If you would invest 1,749 in KeyCorp on August 31, 2024 and sell it today you would earn a total of 203.00 from holding KeyCorp or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. FVCBankcorp
Performance |
| Timeline |
| KeyCorp |
| FVCBankcorp |
KeyCorp and FVCBankcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and FVCBankcorp
The main advantage of trading using opposite KeyCorp and FVCBankcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, FVCBankcorp 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 FVCBankcorp will offset losses from the drop in FVCBankcorp's long position.| KeyCorp vs. Western Alliance Bancorporation | KeyCorp vs. Comerica | KeyCorp vs. Truist Financial Corp | KeyCorp vs. Fifth Third Bancorp |
| FVCBankcorp vs. KeyCorp | FVCBankcorp vs. Comerica | FVCBankcorp vs. First Horizon National | FVCBankcorp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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