Correlation Between Westbury Bancorp and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Westbury Bancorp 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 Westbury Bancorp and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westbury Bancorp and KeyCorp, you can compare the effects of market volatilities on Westbury Bancorp 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 Westbury Bancorp with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westbury Bancorp and KeyCorp.
Diversification Opportunities for Westbury Bancorp and KeyCorp
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westbury and KeyCorp is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Westbury Bancorp and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Westbury Bancorp 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 Westbury 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 Westbury Bancorp i.e., Westbury Bancorp and KeyCorp go up and down completely randomly.
Pair Corralation between Westbury Bancorp and KeyCorp
Given the investment horizon of 90 days Westbury Bancorp is expected to generate 0.19 times more return on investment than KeyCorp. However, Westbury Bancorp is 5.36 times less risky than KeyCorp. It trades about 0.15 of its potential returns per unit of risk. KeyCorp is currently generating about 0.03 per unit of risk. If you would invest 2,755 in Westbury Bancorp on August 27, 2024 and sell it today you would earn a total of 85.00 from holding Westbury Bancorp or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.87% |
| Values | Daily Returns |
Westbury Bancorp vs. KeyCorp
Performance |
| Timeline |
| Westbury Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KeyCorp |
Westbury Bancorp and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westbury Bancorp and KeyCorp
The main advantage of trading using opposite Westbury Bancorp and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westbury Bancorp 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.| Westbury Bancorp vs. Home Federal Bancorp | Westbury Bancorp vs. First Northwest Bancorp | Westbury Bancorp vs. First Community | Westbury Bancorp vs. Oak Valley Bancorp |
| KeyCorp vs. KeyCorp | KeyCorp vs. Regions Financial | KeyCorp vs. US Bancorp | 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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