Correlation Between PacWest Bancorp and KeyCorp
Can any of the company-specific risk be diversified away by investing in both PacWest Bancorp 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 PacWest Bancorp and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacWest Bancorp and KeyCorp, you can compare the effects of market volatilities on PacWest Bancorp 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 PacWest Bancorp with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacWest Bancorp and KeyCorp.
Diversification Opportunities for PacWest Bancorp and KeyCorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PacWest and KeyCorp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PacWest Bancorp and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and PacWest Bancorp 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 PacWest Bancorp 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 PacWest Bancorp i.e., PacWest Bancorp and KeyCorp go up and down completely randomly.
Pair Corralation between PacWest Bancorp and KeyCorp
If you would invest 1,681 in KeyCorp on October 20, 2024 and sell it today you would earn a total of 149.00 from holding KeyCorp or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
PacWest Bancorp vs. KeyCorp
Performance |
| Timeline |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KeyCorp |
PacWest Bancorp and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacWest Bancorp and KeyCorp
The main advantage of trading using opposite PacWest Bancorp and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacWest Bancorp 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.| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
| KeyCorp vs. Western Alliance Bancorporation | KeyCorp vs. Comerica | KeyCorp vs. Truist Financial Corp | KeyCorp vs. Fifth Third Bancorp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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