Correlation Between Voya Financial and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Voya 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 Voya Financial and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Financial and KeyCorp, you can compare the effects of market volatilities on Voya 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 Voya Financial with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Financial and KeyCorp.
Diversification Opportunities for Voya Financial and KeyCorp
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Voya and KeyCorp is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Voya Financial and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Voya 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 Voya 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 Voya Financial i.e., Voya Financial and KeyCorp go up and down completely randomly.
Pair Corralation between Voya Financial and KeyCorp
Given the investment horizon of 90 days Voya Financial is expected to generate 2.04 times more return on investment than KeyCorp. However, Voya Financial is 2.04 times more volatile than KeyCorp. It trades about 0.1 of its potential returns per unit of risk. KeyCorp is currently generating about 0.09 per unit of risk. If you would invest 6,799 in Voya Financial on November 30, 2024 and sell it today you would earn a total of 427.00 from holding Voya Financial or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Financial vs. KeyCorp
Performance |
| Timeline |
| Voya Financial |
| KeyCorp |
Voya Financial and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Financial and KeyCorp
The main advantage of trading using opposite Voya Financial and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya 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.| Voya Financial vs. Lendingtree | Voya Financial vs. Voya Financial | Voya Financial vs. B Riley Financial | Voya Financial 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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