Correlation Between KeyCorp and UniCredit SpA

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

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

Diversification Opportunities for KeyCorp and UniCredit SpA

0.62

Correlation Coefficient

KeyCorp  UniCredit SpA

Poor diversification

The 3 months correlation between KeyCorp and UniCredit is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA 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 UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of KeyCorp i.e., KeyCorp and UniCredit SpA go up and down completely randomly.

Pair Corralation between KeyCorp and UniCredit SpA

Considering the 90-day investment horizon KeyCorp is expected to generate 1.42 times less return on investment than UniCredit SpA. But when comparing it to its historical volatility, KeyCorp is 1.48 times less risky than UniCredit SpA. It trades about 0.21 of its potential returns per unit of risk. UniCredit SpA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  6,488  in UniCredit SpA on May 21, 2025 and sell it today you would earn a total of  1,652  from holding UniCredit SpA or generate 25.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

KeyCorp  vs.  UniCredit SpA

KeyCorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 16 (%) 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.

UniCredit SpA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UniCredit SpA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, UniCredit SpA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KeyCorp and UniCredit SpA

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

The idea behind KeyCorp and UniCredit SpA 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.