Correlation Between KeyCorp and Barclays PLC

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

By analyzing existing cross correlation between KeyCorp and Barclays PLC ADR, you can compare the effects of market volatilities on KeyCorp and Barclays PLC 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 Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and Barclays PLC.

Diversification Opportunities for KeyCorp and Barclays PLC

0.87

Correlation Coefficient

KeyCorp  Barclays PLC

Very poor diversification

The 3 months correlation between KeyCorp and Barclays is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Barclays PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC ADR and KeyCorp 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 KeyCorp are associated (or correlated) with Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC ADR has no effect on the direction of KeyCorp i.e., KeyCorp and Barclays PLC go up and down completely randomly.

Pair Corralation between KeyCorp and Barclays PLC

Considering the 90-day investment horizon KeyCorp is expected to generate 1.17 times less return on investment than Barclays PLC. In addition to that, KeyCorp is 1.11 times more volatile than Barclays PLC ADR. It trades about 0.17 of its total potential returns per unit of risk. Barclays PLC ADR is currently generating about 0.22 per unit of volatility. If you would invest  1,625  in Barclays PLC ADR on May 2, 2025 and sell it today you would earn a total of  337.00  from holding Barclays PLC ADR or generate 20.74% return on investment over 90 days.

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

KeyCorp  vs.  Barclays PLC ADR

KeyCorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, KeyCorp showed solid returns over the last few months and may actually be approaching a breakup point.

Barclays PLC ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barclays PLC ADR are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Barclays PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KeyCorp and Barclays PLC

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

The idea behind KeyCorp and Barclays PLC ADR 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.