Correlation Between KeyCorp and Orange County
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Orange County 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 Orange County into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Orange County Bancorp, you can compare the effects of market volatilities on KeyCorp and Orange County 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 Orange County. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Orange County.
Diversification Opportunities for KeyCorp and Orange County
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KeyCorp and Orange is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Orange County Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange County Bancorp 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 Orange County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange County Bancorp has no effect on the direction of KeyCorp i.e., KeyCorp and Orange County go up and down completely randomly.
Pair Corralation between KeyCorp and Orange County
Considering the 90-day investment horizon KeyCorp is expected to generate 1.21 times more return on investment than Orange County. However, KeyCorp is 1.21 times more volatile than Orange County Bancorp. It trades about 0.18 of its potential returns per unit of risk. Orange County Bancorp is currently generating about 0.19 per unit of risk. If you would invest 1,719 in KeyCorp on September 2, 2024 and sell it today you would earn a total of 229.00 from holding KeyCorp or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. Orange County Bancorp
Performance |
| Timeline |
| KeyCorp |
| Orange County Bancorp |
KeyCorp and Orange County Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Orange County
The main advantage of trading using opposite KeyCorp and Orange County positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Orange County 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 Orange County will offset losses from the drop in Orange County's long position.| KeyCorp vs. Western Alliance Bancorporation | KeyCorp vs. Comerica | KeyCorp vs. Truist Financial Corp | KeyCorp vs. Fifth Third Bancorp |
| Orange County vs. Southern States Bancshares | Orange County vs. US Century Bank | Orange County vs. Third Coast Bancshares | Orange County vs. Esquire Financial Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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