Correlation Between National Bank and KeyCorp
Can any of the company-specific risk be diversified away by investing in both National Bank and KeyCorp 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 National Bank and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and KeyCorp, you can compare the effects of market volatilities on National Bank and KeyCorp 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 National Bank with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and KeyCorp.
Diversification Opportunities for National Bank and KeyCorp
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and KeyCorp is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and National Bank 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 National Bank of are associated (or correlated) with KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of National Bank i.e., National Bank and KeyCorp go up and down completely randomly.
Pair Corralation between National Bank and KeyCorp
Assuming the 90 days horizon National Bank is expected to generate 2.48 times less return on investment than KeyCorp. In addition to that, National Bank is 1.34 times more volatile than KeyCorp. It trades about 0.03 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.09 per unit of volatility. If you would invest 1,102 in KeyCorp on August 26, 2024 and sell it today you would earn a total of 858.00 from holding KeyCorp or generate 77.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. KeyCorp
Performance |
| Timeline |
| National Bank |
| KeyCorp |
National Bank and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and KeyCorp
The main advantage of trading using opposite National Bank and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.| National Bank vs. Standard Bank Group | National Bank vs. PSB Holdings | National Bank vs. United Overseas Bank | National Bank vs. Turkiye Garanti Bankasi |
| KeyCorp vs. Fifth Third Bancorp | KeyCorp vs. Zions Bancorporation | KeyCorp vs. Huntington Bancshares Incorporated | KeyCorp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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