Correlation Between MetroCity Bankshares and KeyCorp

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

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

Diversification Opportunities for MetroCity Bankshares and KeyCorp

0.54

Correlation Coefficient

MetroCity Bankshares  KeyCorp

Very weak diversification

The 3 months correlation between MetroCity and KeyCorp is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding MetroCity Bankshares and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and MetroCity Bankshares 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 MetroCity Bankshares 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 MetroCity Bankshares i.e., MetroCity Bankshares and KeyCorp go up and down completely randomly.

Pair Corralation between MetroCity Bankshares and KeyCorp

Given the investment horizon of 90 days MetroCity Bankshares is expected to under-perform the KeyCorp. In addition to that, MetroCity Bankshares is 2.55 times more volatile than KeyCorp. It trades about -0.03 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.15 per unit of volatility. If you would invest  2,095  in KeyCorp on May 4, 2025 and sell it today you would earn a total of  129.00  from holding KeyCorp or generate 6.16% return on investment over 90 days.

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

MetroCity Bankshares  vs.  KeyCorp

MetroCity Bankshares

Risk-Adjusted Performance

Very Weak

Over the last 90 days MetroCity Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, MetroCity Bankshares is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

KeyCorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, KeyCorp is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MetroCity Bankshares and KeyCorp

The main advantage of trading using opposite MetroCity Bankshares and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetroCity Bankshares 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 MetroCity Bankshares 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.