Correlation Between Key Tronic and FiscalNote Holdings

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

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

Diversification Opportunities for Key Tronic and FiscalNote Holdings

0.6

Correlation Coefficient

Key Tronic  FiscalNote Holdings

Poor diversification

The 3 months correlation between Key and FiscalNote is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Key Tronic and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote Holdings and Key Tronic 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 Key Tronic are associated (or correlated) with FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of Key Tronic i.e., Key Tronic and FiscalNote Holdings go up and down completely randomly.

Pair Corralation between Key Tronic and FiscalNote Holdings

Given the investment horizon of 90 days Key Tronic is expected to generate 0.31 times more return on investment than FiscalNote Holdings. However, Key Tronic is 3.23 times less risky than FiscalNote Holdings. It trades about -0.03 of its potential returns per unit of risk. FiscalNote Holdings is currently generating about -0.02 per unit of risk. If you would invest  309.00  in Key Tronic on May 25, 2025 and sell it today you would lose (17.00) from holding Key Tronic or give up 5.5% of portfolio value over 90 days.

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

Key Tronic  vs.  FiscalNote Holdings

Key Tronic

Risk-Adjusted Performance

Weakest

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

FiscalNote Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Key Tronic and FiscalNote Holdings

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

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