Correlation Between Keeley Small-mid and Vanguard
Can any of the company-specific risk be diversified away by investing in both Keeley Small-mid and Vanguard 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 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 Sp Small Cap, you can compare the effects of market volatilities on Keeley Small-mid and Vanguard 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keeley Small-mid and Vanguard.
Diversification Opportunities for Keeley Small-mid and Vanguard
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Keeley and Vanguard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Keeley Small Mid Cap and Vanguard Sp Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Sp Small 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Sp Small has no effect on the direction of Keeley Small-mid i.e., Keeley Small-mid and Vanguard go up and down completely randomly.
Pair Corralation between Keeley Small-mid and Vanguard
Assuming the 90 days horizon Keeley Small-mid is expected to generate 1.12 times less return on investment than Vanguard. But when comparing it to its historical volatility, Keeley Small Mid Cap is 1.48 times less risky than Vanguard. It trades about 0.31 of its potential returns per unit of risk. Vanguard Sp Small Cap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 38,689 in Vanguard Sp Small Cap on August 29, 2024 and sell it today you would earn a total of 3,421 from holding Vanguard Sp Small Cap or generate 8.84% 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 Sp Small Cap
Performance |
| Timeline |
| Keeley Small Mid |
| Vanguard Sp Small |
Keeley Small-mid and Vanguard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keeley Small-mid and Vanguard
The main advantage of trading using opposite Keeley Small-mid and Vanguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keeley Small-mid position performs unexpectedly, Vanguard 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 will offset losses from the drop in Vanguard's long position.The idea behind Keeley Small Mid Cap and Vanguard Sp Small Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Vanguard vs. Vy Blackrock Inflation | Vanguard vs. Deutsche Global Inflation | Vanguard vs. Loomis Sayles Inflation | Vanguard vs. Guidepath Managed Futures |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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