Correlation Between Associated Banc and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Associated Banc 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 Associated Banc and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Banc Corp and KeyCorp, you can compare the effects of market volatilities on Associated Banc 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 Associated Banc with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and KeyCorp.
Diversification Opportunities for Associated Banc and KeyCorp
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Associated and KeyCorp is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Associated Banc 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 Associated Banc Corp 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 Associated Banc i.e., Associated Banc and KeyCorp go up and down completely randomly.
Pair Corralation between Associated Banc and KeyCorp
Assuming the 90 days trading horizon Associated Banc Corp is expected to generate 0.91 times more return on investment than KeyCorp. However, Associated Banc Corp is 1.09 times less risky than KeyCorp. It trades about 0.01 of its potential returns per unit of risk. KeyCorp is currently generating about -0.05 per unit of risk. If you would invest 1,966 in Associated Banc Corp on March 9, 2024 and sell it today you would earn a total of 5.00 from holding Associated Banc Corp or generate 0.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 97.73% |
Values | Daily Returns |
Associated Banc Corp vs. KeyCorp
Performance |
Timeline |
Associated Banc Corp |
KeyCorp |
Associated Banc and KeyCorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Associated Banc and KeyCorp
The main advantage of trading using opposite Associated Banc and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Banc 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.Associated Banc vs. Truist Financial | Associated Banc vs. Truist Financial | Associated Banc vs. US Bancorp | Associated Banc vs. MetLife Preferred Stock |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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