Correlation Between Bank of the and Keepers Holdings

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

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

Diversification Opportunities for Bank of the and Keepers Holdings

0.5

Correlation Coefficient

Bank of the  Keepers Holdings

Very weak diversification

The 3 months correlation between Bank and Keepers is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank of the and Keepers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keepers Holdings and Bank of the 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 Bank of the are associated (or correlated) with Keepers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keepers Holdings has no effect on the direction of Bank of the i.e., Bank of the and Keepers Holdings go up and down completely randomly.

Pair Corralation between Bank of the and Keepers Holdings

Assuming the 90 days trading horizon Bank of the is expected to under-perform the Keepers Holdings. In addition to that, Bank of the is 1.2 times more volatile than Keepers Holdings. It trades about -0.04 of its total potential returns per unit of risk. Keepers Holdings is currently generating about -0.02 per unit of volatility. If you would invest  264.00  in Keepers Holdings on April 25, 2025 and sell it today you would lose (6.00) from holding Keepers Holdings or give up 2.27% of portfolio value over 90 days.

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

Bank of the  vs.  Keepers Holdings

Bank of the

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank of the has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Bank of the is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Keepers Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keepers Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Keepers Holdings is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bank of the and Keepers Holdings

The main advantage of trading using opposite Bank of the and Keepers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of the position performs unexpectedly, Keepers Holdings 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 Keepers Holdings will offset losses from the drop in Keepers Holdings' long position.

The idea behind Bank of the and Keepers Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.