Correlation Between Lendingtree and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Lendingtree 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 Lendingtree and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendingtree and KeyCorp, you can compare the effects of market volatilities on Lendingtree 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 Lendingtree with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendingtree and KeyCorp.
Diversification Opportunities for Lendingtree and KeyCorp
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lendingtree and KeyCorp is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lendingtree and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Lendingtree 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 Lendingtree 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 Lendingtree i.e., Lendingtree and KeyCorp go up and down completely randomly.
Pair Corralation between Lendingtree and KeyCorp
Given the investment horizon of 90 days Lendingtree is expected to under-perform the KeyCorp. In addition to that, Lendingtree is 8.11 times more volatile than KeyCorp. It trades about -0.17 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.06 per unit of volatility. If you would invest 2,545 in KeyCorp on September 1, 2024 and sell it today you would earn a total of 21.00 from holding KeyCorp or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendingtree vs. KeyCorp
Performance |
| Timeline |
| Lendingtree |
| KeyCorp |
Lendingtree and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendingtree and KeyCorp
The main advantage of trading using opposite Lendingtree and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendingtree 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.| Lendingtree vs. Voya Financial | Lendingtree vs. B Riley Financial | Lendingtree vs. Voya Financial | Lendingtree vs. B Riley Financial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |