diversifiable risk of combining KeyCorp and Ensign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and The Ensign Group, you can compare the effects of market volatilities on KeyCorp and Ensign 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 Ensign. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Ensign.
Diversification Opportunities for KeyCorp and Ensign
Pair Corralation between KeyCorp and Ensign
Assuming the 90 days horizon KeyCorp is expected to under-perform the Ensign. In addition to that, KeyCorp is 1.12 times more volatile than The Ensign Group. It trades about -0.03 of its total potential returns per unit of risk. The Ensign Group is currently generating about 0.11 per unit of volatility. If you would invest 10,700 in The Ensign Group on November 24, 2023 and sell it today you would earn a total of 400.00 from holding The Ensign Group or generate 3.74% return on investment over 90 days.
KeyCorp vs. The Ensign Group
Pair Trading with KeyCorp and EnsignThe main advantage of trading using opposite KeyCorp and Ensign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, Ensign 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 Ensign will offset losses from the drop in Ensign's long position. The idea behind KeyCorp and The Ensign Group 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.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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