Correlation Between IShares Evolved and KEYCORP

Can any of the company-specific risk be diversified away by investing in both IShares Evolved 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 IShares Evolved and KEYCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Evolved Technology and KEYCORP MEDIUM TERM, you can compare the effects of market volatilities on IShares Evolved 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 IShares Evolved with a short position of KEYCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Evolved and KEYCORP.

Diversification Opportunities for IShares Evolved and KEYCORP

-0.63

Correlation Coefficient

IShares Evolved  KEYCORP

Excellent diversification

The 3 months correlation between IShares and KEYCORP is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding iShares Evolved Technology 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 IShares Evolved 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 iShares Evolved Technology 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 IShares Evolved i.e., IShares Evolved and KEYCORP go up and down completely randomly.

Pair Corralation between IShares Evolved and KEYCORP

Given the investment horizon of 90 days iShares Evolved Technology is expected to generate 1.3 times more return on investment than KEYCORP. However, IShares Evolved is 1.3 times more volatile than KEYCORP MEDIUM TERM. It trades about 0.13 of its potential returns per unit of risk. KEYCORP MEDIUM TERM is currently generating about -0.03 per unit of risk. If you would invest  7,810  in iShares Evolved Technology on September 24, 2024 and sell it today you would earn a total of  792.00  from holding iShares Evolved Technology or generate 10.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

iShares Evolved Technology  vs.  KEYCORP MEDIUM TERM

iShares Evolved Tech

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Evolved Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, IShares Evolved may actually be approaching a critical reversion point that can send shares even higher in January 2025.

KEYCORP MEDIUM TERM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEYCORP MEDIUM TERM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KEYCORP is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Evolved and KEYCORP

The main advantage of trading using opposite IShares Evolved and KEYCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Evolved 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 iShares Evolved Technology 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.