Correlation Between William Penn and KeyCorp
Can any of the company-specific risk be diversified away by investing in both William Penn 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 William Penn and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Penn Bancorp and KeyCorp, you can compare the effects of market volatilities on William Penn 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 William Penn with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Penn and KeyCorp.
Diversification Opportunities for William Penn and KeyCorp
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between William and KeyCorp is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding William Penn Bancorp and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and William Penn 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 William Penn 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 William Penn i.e., William Penn and KeyCorp go up and down completely randomly.
Pair Corralation between William Penn and KeyCorp
Given the investment horizon of 90 days William Penn Bancorp is expected to generate 1.03 times more return on investment than KeyCorp. However, William Penn is 1.03 times more volatile than KeyCorp. It trades about 0.24 of its potential returns per unit of risk. KeyCorp is currently generating about 0.07 per unit of risk. If you would invest 1,167 in William Penn Bancorp on November 9, 2024 and sell it today you would earn a total of 91.00 from holding William Penn Bancorp or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Penn Bancorp vs. KeyCorp
Performance |
| Timeline |
| William Penn Bancorp |
| KeyCorp |
William Penn and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Penn and KeyCorp
The main advantage of trading using opposite William Penn and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Penn 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.| William Penn vs. Home Federal Bancorp | William Penn vs. First Financial Northwest | William Penn vs. First Northwest Bancorp | William Penn vs. First Capital |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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