Correlation Between PNC Financial and KeyCorp
Can any of the company-specific risk be diversified away by investing in both PNC Financial 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 PNC Financial and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The PNC Financial and KeyCorp, you can compare the effects of market volatilities on PNC Financial 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 PNC Financial with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and KeyCorp.
Diversification Opportunities for PNC Financial and KeyCorp
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PNC and KeyCorp is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding The PNC Financial and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and PNC Financial 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 The PNC Financial 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 PNC Financial i.e., PNC Financial and KeyCorp go up and down completely randomly.
Pair Corralation between PNC Financial and KeyCorp
Assuming the 90 days horizon PNC Financial is expected to generate 1.22 times less return on investment than KeyCorp. But when comparing it to its historical volatility, The PNC Financial is 1.51 times less risky than KeyCorp. It trades about 0.12 of its potential returns per unit of risk. KeyCorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 832.00 in KeyCorp on August 29, 2024 and sell it today you would earn a total of 1,041 from holding KeyCorp or generate 125.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The PNC Financial vs. KeyCorp
Performance |
| Timeline |
| PNC Financial |
| KeyCorp |
PNC Financial and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNC Financial and KeyCorp
The main advantage of trading using opposite PNC Financial and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial 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.| PNC Financial vs. Superior Plus Corp | PNC Financial vs. NMI Holdings | PNC Financial vs. Origin Agritech | PNC Financial vs. SIVERS SEMICONDUCTORS AB |
| KeyCorp vs. Superior Plus Corp | KeyCorp vs. NMI Holdings | KeyCorp vs. Origin Agritech | KeyCorp vs. SIVERS SEMICONDUCTORS AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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