Correlation Between Communication Services and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Communication Services 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 Communication Services and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Communication Services Select and KeyCorp, you can compare the effects of market volatilities on Communication Services 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 Communication Services with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Services and KeyCorp.
Diversification Opportunities for Communication Services and KeyCorp
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Communication and KeyCorp is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Communication Services Select and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Communication Services 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 Communication Services Select 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 Communication Services i.e., Communication Services and KeyCorp go up and down completely randomly.
Pair Corralation between Communication Services and KeyCorp
Considering the 90-day investment horizon Communication Services Select is expected to generate 2.11 times more return on investment than KeyCorp. However, Communication Services is 2.11 times more volatile than KeyCorp. It trades about 0.12 of its potential returns per unit of risk. KeyCorp is currently generating about 0.12 per unit of risk. If you would invest 10,726 in Communication Services Select on August 8, 2025 and sell it today you would earn a total of 616.00 from holding Communication Services Select or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Communication Services Select vs. KeyCorp
Performance |
| Timeline |
| Communication Services |
| KeyCorp |
Communication Services and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication Services and KeyCorp
The main advantage of trading using opposite Communication Services and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Services 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.| Communication Services vs. Energy Select Sector | Communication Services vs. Consumer Discretionary Select | Communication Services vs. iShares MSCI EAFE | Communication Services vs. iShares SP 100 |
| KeyCorp vs. Truist Financial Corp | KeyCorp vs. Huntington Bancshares Incorporated | KeyCorp vs. Fifth Third Bancorp | KeyCorp vs. US Bancorp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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