Correlation Between UBS Group and KeyCorp

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

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

Diversification Opportunities for UBS Group and KeyCorp

0.94

Correlation Coefficient

UBS Group  KeyCorp

Almost no diversification

The 3 months correlation between UBS and KeyCorp is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and UBS Group 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 UBS Group AG 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 UBS Group i.e., UBS Group and KeyCorp go up and down completely randomly.

Pair Corralation between UBS Group and KeyCorp

Considering the 90-day investment horizon UBS Group is expected to generate 1.0 times less return on investment than KeyCorp. In addition to that, UBS Group is 1.01 times more volatile than KeyCorp. It trades about 0.25 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.25 per unit of volatility. If you would invest  1,453  in KeyCorp on April 25, 2025 and sell it today you would earn a total of  397.00  from holding KeyCorp or generate 27.32% return on investment over 90 days.

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

UBS Group AG  vs.  KeyCorp

UBS Group AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Group AG are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental drivers, UBS Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

KeyCorp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 19 (%) 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.

Pair Trading with UBS Group and KeyCorp

The main advantage of trading using opposite UBS Group and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group 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 UBS Group AG 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.