Correlation Between Mauch Chunk and KeyCorp

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

By analyzing existing cross correlation between Mauch Chunk Trust and KeyCorp, you can compare the effects of market volatilities on Mauch Chunk 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 Mauch Chunk with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauch Chunk and KeyCorp.

Diversification Opportunities for Mauch Chunk and KeyCorp

-0.34

Correlation Coefficient

Mauch Chunk  KeyCorp

Very good diversification

The 3 months correlation between Mauch and KeyCorp is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mauch Chunk Trust and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Mauch Chunk 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 Mauch Chunk Trust 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 Mauch Chunk i.e., Mauch Chunk and KeyCorp go up and down completely randomly.

Pair Corralation between Mauch Chunk and KeyCorp

Given the investment horizon of 90 days Mauch Chunk Trust is expected to under-perform the KeyCorp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mauch Chunk Trust is 1.61 times less risky than KeyCorp. The pink sheet trades about -0.02 of its potential returns per unit of risk. The KeyCorp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,607  in KeyCorp on September 5, 2024 and sell it today you would earn a total of  274.00  from holding KeyCorp or generate 17.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mauch Chunk Trust  vs.  KeyCorp

Mauch Chunk Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mauch Chunk Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Mauch Chunk is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

KeyCorp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, KeyCorp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mauch Chunk and KeyCorp

The main advantage of trading using opposite Mauch Chunk and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauch Chunk 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 Mauch Chunk Trust and KeyCorp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.