Correlation Between Elis SA and KeyCorp

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

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

Diversification Opportunities for Elis SA and KeyCorp

0.83

Correlation Coefficient

Elis SA  KeyCorp

Very poor diversification

The 3 months correlation between Elis and KeyCorp is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Elis SA 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 Elis SA 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 Elis SA i.e., Elis SA and KeyCorp go up and down completely randomly.

Pair Corralation between Elis SA and KeyCorp

Assuming the 90 days horizon Elis SA is expected to generate 2.07 times less return on investment than KeyCorp. But when comparing it to its historical volatility, Elis SA is 1.37 times less risky than KeyCorp. It trades about 0.17 of its potential returns per unit of risk. KeyCorp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,165  in KeyCorp on April 22, 2025 and sell it today you would earn a total of  411.00  from holding KeyCorp or generate 35.28% return on investment over 90 days.

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

Elis SA  vs.  KeyCorp

Elis SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Elis SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Elis SA reported solid returns over the last few months and may actually be approaching a breakup point.

KeyCorp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KeyCorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elis SA and KeyCorp

The main advantage of trading using opposite Elis SA and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elis SA 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 Elis SA 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.