Correlation Between Cars and KEYCORP
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By analyzing existing cross correlation between Cars Inc and KEYCORP MEDIUM TERM, you can compare the effects of market volatilities on Cars 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 Cars with a short position of KEYCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and KEYCORP.
Diversification Opportunities for Cars and KEYCORP
Good diversification
The 3 months correlation between Cars and KEYCORP is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and KEYCORP MEDIUM TERM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYCORP MEDIUM TERM and Cars 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 Cars Inc 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 MEDIUM TERM has no effect on the direction of Cars i.e., Cars and KEYCORP go up and down completely randomly.
Pair Corralation between Cars and KEYCORP
Given the investment horizon of 90 days Cars Inc is expected to generate 2.87 times more return on investment than KEYCORP. However, Cars is 2.87 times more volatile than KEYCORP MEDIUM TERM. It trades about 0.01 of its potential returns per unit of risk. KEYCORP MEDIUM TERM is currently generating about -0.12 per unit of risk. If you would invest 1,749 in Cars Inc on September 24, 2024 and sell it today you would lose (3.00) from holding Cars Inc or give up 0.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.38% |
Values | Daily Returns |
Cars Inc vs. KEYCORP MEDIUM TERM
Performance |
Timeline |
Cars Inc |
KEYCORP MEDIUM TERM |
Cars and KEYCORP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cars and KEYCORP
The main advantage of trading using opposite Cars and KEYCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars 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.The idea behind Cars Inc and KEYCORP MEDIUM TERM pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.KEYCORP vs. Li Auto | KEYCORP vs. Modine Manufacturing | KEYCORP vs. Cars Inc | KEYCORP vs. Yuexiu Transport Infrastructure |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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