Correlation Between United Community and KeyCorp
Can any of the company-specific risk be diversified away by investing in both United Community 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 United Community and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Community Banks, and KeyCorp, you can compare the effects of market volatilities on United Community 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 United Community with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Community and KeyCorp.
Diversification Opportunities for United Community and KeyCorp
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and KeyCorp is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Community Banks, and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and United Community 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 United Community Banks, 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 United Community i.e., United Community and KeyCorp go up and down completely randomly.
Pair Corralation between United Community and KeyCorp
Considering the 90-day investment horizon United Community is expected to generate 3.27 times less return on investment than KeyCorp. But when comparing it to its historical volatility, United Community Banks, is 1.32 times less risky than KeyCorp. It trades about 0.01 of its potential returns per unit of risk. KeyCorp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,541 in KeyCorp on August 29, 2024 and sell it today you would earn a total of 425.00 from holding KeyCorp or generate 27.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Community Banks, vs. KeyCorp
Performance |
| Timeline |
| United Community Banks, |
| KeyCorp |
United Community and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Community and KeyCorp
The main advantage of trading using opposite United Community and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Community 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.| United Community vs. Alliant Energy Corp | United Community vs. PGE Corp | United Community vs. Reservoir Media | United Community vs. Transportadora de Gas |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |