Correlation Between Century Small and Keeley Small
Can any of the company-specific risk be diversified away by investing in both Century Small 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 Century Small and Keeley Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Small Cap and Keeley Small Cap, you can compare the effects of market volatilities on Century Small 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 Century Small with a short position of Keeley Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Small and Keeley Small.
Diversification Opportunities for Century Small and Keeley Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Century and Keeley is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Century Small Cap 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 Century Small 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 Century Small Cap 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 Century Small i.e., Century Small and Keeley Small go up and down completely randomly.
Pair Corralation between Century Small and Keeley Small
Assuming the 90 days horizon Century Small Cap is expected to generate 1.21 times more return on investment than Keeley Small. However, Century Small is 1.21 times more volatile than Keeley Small Cap. It trades about 0.14 of its potential returns per unit of risk. Keeley Small Cap is currently generating about 0.01 per unit of risk. If you would invest 4,138 in Century Small Cap on September 18, 2024 and sell it today you would earn a total of 103.00 from holding Century Small Cap or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Century Small Cap vs. Keeley Small Cap
Performance |
| Timeline |
| Century Small Cap |
| Keeley Small Cap |
Century Small and Keeley Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Small and Keeley Small
The main advantage of trading using opposite Century Small and Keeley Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Small 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.| Century Small vs. Third Avenue Real | Century Small vs. Aegis Value Fund | Century Small vs. Litman Gregory Masters | Century Small vs. Marsico Growth Fund |
| Keeley Small vs. T Rowe Price | Keeley Small vs. Nasdaq 100 Index Fund | Keeley Small vs. Balanced Fund Investor | Keeley Small vs. Century Small Cap |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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