Correlation Between Keeley Small and Short-term Government
Can any of the company-specific risk be diversified away by investing in both Keeley Small and Short-term Government 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 Small and Short-term Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keeley Small Cap and Short Term Government Fund, you can compare the effects of market volatilities on Keeley Small and Short-term Government 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 Small with a short position of Short-term Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keeley Small and Short-term Government.
Diversification Opportunities for Keeley Small and Short-term Government
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Keeley and Short-term is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Keeley Small Cap and Short Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Government and Keeley 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 Keeley Small Cap are associated (or correlated) with Short-term Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Government has no effect on the direction of Keeley Small i.e., Keeley Small and Short-term Government go up and down completely randomly.
Pair Corralation between Keeley Small and Short-term Government
Assuming the 90 days horizon Keeley Small Cap is expected to generate 13.46 times more return on investment than Short-term Government. However, Keeley Small is 13.46 times more volatile than Short Term Government Fund. It trades about 0.32 of its potential returns per unit of risk. Short Term Government Fund is currently generating about -0.05 per unit of risk. If you would invest 1,827 in Keeley Small Cap on September 1, 2024 and sell it today you would earn a total of 172.00 from holding Keeley Small Cap or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keeley Small Cap vs. Short Term Government Fund
Performance |
| Timeline |
| Keeley Small Cap |
| Short Term Government |
Keeley Small and Short-term Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keeley Small and Short-term Government
The main advantage of trading using opposite Keeley Small and Short-term Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keeley Small position performs unexpectedly, Short-term Government 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 Short-term Government will offset losses from the drop in Short-term Government's long position.| Keeley Small vs. Fundamental Large Cap | Keeley Small vs. Qs Large Cap | Keeley Small vs. Jhancock Disciplined Value | Keeley Small vs. Dunham Large Cap |
| Short-term Government vs. T Rowe Price | Short-term Government vs. Dodge Global Stock | Short-term Government vs. Ms Global Fixed | Short-term Government vs. Us Global Leaders |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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