Correlation Between KeyCorp and Toro
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Toro 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 KeyCorp and Toro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and Toro Co, you can compare the effects of market volatilities on KeyCorp and Toro 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 KeyCorp with a short position of Toro. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Toro.
Diversification Opportunities for KeyCorp and Toro
Significant diversification
The 3 months correlation between KeyCorp and Toro is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Toro Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toro and KeyCorp 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 KeyCorp are associated (or correlated) with Toro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toro has no effect on the direction of KeyCorp i.e., KeyCorp and Toro go up and down completely randomly.
Pair Corralation between KeyCorp and Toro
Assuming the 90 days trading horizon KeyCorp is expected to generate 0.57 times more return on investment than Toro. However, KeyCorp is 1.76 times less risky than Toro. It trades about 0.06 of its potential returns per unit of risk. Toro Co is currently generating about -0.02 per unit of risk. If you would invest 2,059 in KeyCorp on September 25, 2024 and sell it today you would earn a total of 316.00 from holding KeyCorp or generate 15.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.6% |
Values | Daily Returns |
KeyCorp vs. Toro Co
Performance |
Timeline |
KeyCorp |
Toro |
KeyCorp and Toro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KeyCorp and Toro
The main advantage of trading using opposite KeyCorp and Toro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Toro 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 Toro will offset losses from the drop in Toro's long position.KeyCorp vs. Tectonic Financial PR | KeyCorp vs. First Guaranty Bancshares | KeyCorp vs. First Merchants | KeyCorp vs. Metropolitan Bank Holding |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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