Correlation Between Keeley Mid and Small Cap
Can any of the company-specific risk be diversified away by investing in both Keeley Mid and Small Cap 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 Keeley Mid and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keeley Mid Cap and Small Cap Core, you can compare the effects of market volatilities on Keeley Mid and Small Cap 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 Keeley Mid with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keeley Mid and Small Cap.
Diversification Opportunities for Keeley Mid and Small Cap
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Keeley and Small is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Keeley Mid Cap and Small Cap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Core and Keeley Mid 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 Keeley Mid Cap are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Core has no effect on the direction of Keeley Mid i.e., Keeley Mid and Small Cap go up and down completely randomly.
Pair Corralation between Keeley Mid and Small Cap
Assuming the 90 days horizon Keeley Mid is expected to generate 1.02 times less return on investment than Small Cap. But when comparing it to its historical volatility, Keeley Mid Cap is 1.6 times less risky than Small Cap. It trades about 0.27 of its potential returns per unit of risk. Small Cap Core is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,393 in Small Cap Core on August 29, 2024 and sell it today you would earn a total of 93.00 from holding Small Cap Core or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keeley Mid Cap vs. Small Cap Core
Performance |
| Timeline |
| Keeley Mid Cap |
| Small Cap Core |
Keeley Mid and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keeley Mid and Small Cap
The main advantage of trading using opposite Keeley Mid and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keeley Mid position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Keeley Mid vs. Victory Sycamore Established | Keeley Mid vs. Columbia Select Large Cap | Keeley Mid vs. Boston Trust Midcap | Keeley Mid vs. Bny Mellon Mid |
| Small Cap vs. The National Tax Free | Small Cap vs. Ishares Municipal Bond | Small Cap vs. Franklin High Yield | Small Cap vs. Gamco Global Telecommunications |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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