Correlation Between Pacific Premier and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Pacific Premier 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 Pacific Premier and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Premier Bancorp and KeyCorp, you can compare the effects of market volatilities on Pacific Premier 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 Pacific Premier with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Premier and KeyCorp.
Diversification Opportunities for Pacific Premier and KeyCorp
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pacific and KeyCorp is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Premier Bancorp and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Pacific Premier 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 Pacific Premier 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 Pacific Premier i.e., Pacific Premier and KeyCorp go up and down completely randomly.
Pair Corralation between Pacific Premier and KeyCorp
Given the investment horizon of 90 days Pacific Premier is expected to generate 1.09 times less return on investment than KeyCorp. In addition to that, Pacific Premier is 1.12 times more volatile than KeyCorp. It trades about 0.11 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.13 per unit of volatility. If you would invest 1,370 in KeyCorp on September 2, 2024 and sell it today you would earn a total of 578.00 from holding KeyCorp or generate 42.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Premier Bancorp vs. KeyCorp
Performance |
| Timeline |
| Pacific Premier Bancorp |
| KeyCorp |
Pacific Premier and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Premier and KeyCorp
The main advantage of trading using opposite Pacific Premier and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Premier 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.| Pacific Premier vs. Community West Bancshares | Pacific Premier vs. Heritage Financial | Pacific Premier vs. First Financial Northwest | Pacific Premier vs. Sierra Bancorp |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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