Correlation Between KeyCorp and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both KeyCorp and Thyssenkrupp 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 Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and thyssenkrupp AG, you can compare the effects of market volatilities on KeyCorp and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Thyssenkrupp.
Diversification Opportunities for KeyCorp and Thyssenkrupp
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KeyCorp and Thyssenkrupp is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of KeyCorp i.e., KeyCorp and Thyssenkrupp go up and down completely randomly.
Pair Corralation between KeyCorp and Thyssenkrupp
Assuming the 90 days horizon KeyCorp is expected to generate 1.84 times less return on investment than Thyssenkrupp. But when comparing it to its historical volatility, KeyCorp is 2.08 times less risky than Thyssenkrupp. It trades about 0.1 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 314.00 in thyssenkrupp AG on September 26, 2024 and sell it today you would earn a total of 66.00 from holding thyssenkrupp AG or generate 21.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KeyCorp vs. thyssenkrupp AG
Performance |
Timeline |
KeyCorp |
thyssenkrupp AG |
KeyCorp and Thyssenkrupp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KeyCorp and Thyssenkrupp
The main advantage of trading using opposite KeyCorp and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.KeyCorp vs. Iridium Communications | KeyCorp vs. MAVEN WIRELESS SWEDEN | KeyCorp vs. NURAN WIRELESS INC | KeyCorp vs. CITY OFFICE REIT |
Thyssenkrupp vs. BURLINGTON STORES | Thyssenkrupp vs. Coffee Holding Co | Thyssenkrupp vs. ETFS Coffee ETC | Thyssenkrupp vs. Cogent Communications Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |