Correlation Between Growth Fund and Keeley Small
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Keeley Small 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 Growth Fund and Keeley Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Keeley Small Cap, you can compare the effects of market volatilities on Growth Fund and Keeley Small 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 Growth Fund with a short position of Keeley Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Keeley Small.
Diversification Opportunities for Growth Fund and Keeley Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and Keeley is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Keeley Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keeley Small Cap and Growth Fund 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 Growth Fund Of are associated (or correlated) with Keeley Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keeley Small Cap has no effect on the direction of Growth Fund i.e., Growth Fund and Keeley Small go up and down completely randomly.
Pair Corralation between Growth Fund and Keeley Small
Assuming the 90 days horizon Growth Fund is expected to generate 1.92 times less return on investment than Keeley Small. But when comparing it to its historical volatility, Growth Fund Of is 1.42 times less risky than Keeley Small. It trades about 0.2 of its potential returns per unit of risk. Keeley Small Cap is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,840 in Keeley Small Cap on August 29, 2024 and sell it today you would earn a total of 159.00 from holding Keeley Small Cap or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Keeley Small Cap
Performance |
| Timeline |
| Growth Fund |
| Keeley Small Cap |
Growth Fund and Keeley Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Keeley Small
The main advantage of trading using opposite Growth Fund and Keeley Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Keeley Small 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 Keeley Small will offset losses from the drop in Keeley Small's long position.| Growth Fund vs. Capital World Growth | Growth Fund vs. Europacific Growth Fund | Growth Fund vs. New Perspective Fund | Growth Fund vs. Investment Of America |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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