Correlation Between Omni Small-cap and Keeley Small-mid
Can any of the company-specific risk be diversified away by investing in both Omni Small-cap and Keeley Small-mid 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 Omni Small-cap and Keeley Small-mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and Keeley Small Mid Cap, you can compare the effects of market volatilities on Omni Small-cap and Keeley Small-mid 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 Omni Small-cap with a short position of Keeley Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small-cap and Keeley Small-mid.
Diversification Opportunities for Omni Small-cap and Keeley Small-mid
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Omni and Keeley is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value and Keeley Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keeley Small Mid and Omni Small-cap 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 Omni Small Cap Value are associated (or correlated) with Keeley Small-mid. 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 Mid has no effect on the direction of Omni Small-cap i.e., Omni Small-cap and Keeley Small-mid go up and down completely randomly.
Pair Corralation between Omni Small-cap and Keeley Small-mid
Assuming the 90 days horizon Omni Small Cap Value is expected to generate 1.3 times more return on investment than Keeley Small-mid. However, Omni Small-cap is 1.3 times more volatile than Keeley Small Mid Cap. It trades about 0.07 of its potential returns per unit of risk. Keeley Small Mid Cap is currently generating about 0.07 per unit of risk. If you would invest 1,547 in Omni Small Cap Value on September 2, 2024 and sell it today you would earn a total of 590.00 from holding Omni Small Cap Value or generate 38.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. Keeley Small Mid Cap
Performance |
| Timeline |
| Omni Small Cap |
| Keeley Small Mid |
Omni Small-cap and Keeley Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small-cap and Keeley Small-mid
The main advantage of trading using opposite Omni Small-cap and Keeley Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small-cap position performs unexpectedly, Keeley Small-mid 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-mid will offset losses from the drop in Keeley Small-mid's long position.| Omni Small-cap vs. Aggressive Investors 1 | Omni Small-cap vs. Managed Volatility Fund | Omni Small-cap vs. Small Cap Value Fund |
| Keeley Small-mid vs. Inflation Protected Bond Fund | Keeley Small-mid vs. Legg Mason Partners | Keeley Small-mid vs. Thrivent Income Fund | Keeley Small-mid vs. T Rowe Price |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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