Correlation Between New York and KeyCorp
Can any of the company-specific risk be diversified away by investing in both New York 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 New York and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New York Community and KeyCorp, you can compare the effects of market volatilities on New York 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 New York with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and KeyCorp.
Diversification Opportunities for New York and KeyCorp
Poor diversification
The 3 months correlation between New and KeyCorp is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding New York Community and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and New York 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 New York Community 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 New York i.e., New York and KeyCorp go up and down completely randomly.
Pair Corralation between New York and KeyCorp
Assuming the 90 days trading horizon New York is expected to generate 1.22 times less return on investment than KeyCorp. In addition to that, New York is 1.26 times more volatile than KeyCorp. It trades about 0.02 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.03 per unit of volatility. If you would invest 2,143 in KeyCorp on August 29, 2024 and sell it today you would earn a total of 351.00 from holding KeyCorp or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New York Community vs. KeyCorp
Performance |
| Timeline |
| New York Community |
| KeyCorp |
New York and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and KeyCorp
The main advantage of trading using opposite New York and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York 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.| New York vs. Wintrust Financial Corp | New York vs. Pinnacle Financial Partners | New York vs. Associated Banc Corp | New York vs. WesBanco |
| KeyCorp vs. KeyCorp | KeyCorp vs. Associated Banc Corp | KeyCorp vs. New York Community | KeyCorp vs. Synovus Financial Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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