Correlation Between KeyCorp and Shore Bancshares
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Shore Bancshares 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 Shore Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Shore Bancshares, you can compare the effects of market volatilities on KeyCorp and Shore Bancshares 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 Shore Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Shore Bancshares.
Diversification Opportunities for KeyCorp and Shore Bancshares
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KeyCorp and Shore is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Shore Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shore Bancshares 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 Shore Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shore Bancshares has no effect on the direction of KeyCorp i.e., KeyCorp and Shore Bancshares go up and down completely randomly.
Pair Corralation between KeyCorp and Shore Bancshares
Considering the 90-day investment horizon KeyCorp is expected to generate 1.38 times more return on investment than Shore Bancshares. However, KeyCorp is 1.38 times more volatile than Shore Bancshares. It trades about 0.03 of its potential returns per unit of risk. Shore Bancshares is currently generating about 0.01 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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. Shore Bancshares
Performance |
| Timeline |
| KeyCorp |
| Shore Bancshares |
KeyCorp and Shore Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and Shore Bancshares
The main advantage of trading using opposite KeyCorp and Shore Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Shore Bancshares 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 Shore Bancshares will offset losses from the drop in Shore Bancshares' long position.| KeyCorp vs. Western Alliance Bancorporation | KeyCorp vs. Comerica | KeyCorp vs. Truist Financial Corp | KeyCorp vs. Fifth Third Bancorp |
| Shore Bancshares vs. KeyCorp | Shore Bancshares vs. Comerica | Shore Bancshares vs. First Horizon National | Shore Bancshares 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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