Correlation Between Keeley Small-mid and Vanguard Equity
Can any of the company-specific risk be diversified away by investing in both Keeley Small-mid and Vanguard Equity 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-mid and Vanguard Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keeley Small Mid Cap and Vanguard Equity Income, you can compare the effects of market volatilities on Keeley Small-mid and Vanguard Equity 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-mid with a short position of Vanguard Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keeley Small-mid and Vanguard Equity.
Diversification Opportunities for Keeley Small-mid and Vanguard Equity
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Keeley and Vanguard is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Keeley Small Mid Cap and Vanguard Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Equity Income and Keeley Small-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 Small Mid Cap are associated (or correlated) with Vanguard Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Equity Income has no effect on the direction of Keeley Small-mid i.e., Keeley Small-mid and Vanguard Equity go up and down completely randomly.
Pair Corralation between Keeley Small-mid and Vanguard Equity
Assuming the 90 days horizon Keeley Small Mid Cap is expected to generate 1.46 times more return on investment than Vanguard Equity. However, Keeley Small-mid is 1.46 times more volatile than Vanguard Equity Income. It trades about 0.31 of its potential returns per unit of risk. Vanguard Equity Income is currently generating about 0.18 per unit of risk. If you would invest 1,040 in Keeley Small Mid Cap on August 29, 2024 and sell it today you would earn a total of 83.00 from holding Keeley Small Mid Cap or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keeley Small Mid Cap vs. Vanguard Equity Income
Performance |
| Timeline |
| Keeley Small Mid |
| Vanguard Equity Income |
Keeley Small-mid and Vanguard Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keeley Small-mid and Vanguard Equity
The main advantage of trading using opposite Keeley Small-mid and Vanguard Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keeley Small-mid position performs unexpectedly, Vanguard Equity 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 Vanguard Equity will offset losses from the drop in Vanguard Equity's long position.| Keeley Small-mid vs. Artisan Select Equity | Keeley Small-mid vs. Gmo Global Equity | Keeley Small-mid vs. Gmo Equity Allocation | Keeley Small-mid vs. Ultra Short Term Fixed |
| Vanguard Equity vs. Vanguard Dividend Growth | Vanguard Equity vs. Vanguard Wellesley Income | Vanguard Equity vs. Vanguard Wellington Fund | Vanguard Equity vs. Vanguard Growth And |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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