Correlation Between KeyCorp and William Penn
Can any of the company-specific risk be diversified away by investing in both KeyCorp and William Penn 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 William Penn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and William Penn Bancorp, you can compare the effects of market volatilities on KeyCorp and William Penn 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 William Penn. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and William Penn.
Diversification Opportunities for KeyCorp and William Penn
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KeyCorp and William is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and William Penn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Penn 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 William Penn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Penn Bancorp has no effect on the direction of KeyCorp i.e., KeyCorp and William Penn go up and down completely randomly.
Pair Corralation between KeyCorp and William Penn
Considering the 90-day investment horizon KeyCorp is expected to generate 1.77 times more return on investment than William Penn. However, KeyCorp is 1.77 times more volatile than William Penn Bancorp. It trades about 0.12 of its potential returns per unit of risk. William Penn Bancorp is currently generating about 0.07 per unit of risk. If you would invest 1,402 in KeyCorp on August 25, 2024 and sell it today you would earn a total of 558.00 from holding KeyCorp or generate 39.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KeyCorp vs. William Penn Bancorp
Performance |
| Timeline |
| KeyCorp |
| William Penn Bancorp |
KeyCorp and William Penn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and William Penn
The main advantage of trading using opposite KeyCorp and William Penn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, William Penn 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 William Penn will offset losses from the drop in William Penn's long position.| KeyCorp vs. Fifth Third Bancorp | KeyCorp vs. Zions Bancorporation | KeyCorp vs. Huntington Bancshares Incorporated | KeyCorp vs. PNC Financial Services |
| William Penn vs. Fifth Third Bancorp | William Penn vs. Zions Bancorporation | William Penn vs. Huntington Bancshares Incorporated | William Penn vs. PNC Financial Services |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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