Correlation Between Longleaf Partners and Keeley Small
Can any of the company-specific risk be diversified away by investing in both Longleaf Partners 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 Longleaf Partners and Keeley Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longleaf Partners Fund and Keeley Small Cap, you can compare the effects of market volatilities on Longleaf Partners 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 Longleaf Partners with a short position of Keeley Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longleaf Partners and Keeley Small.
Diversification Opportunities for Longleaf Partners and Keeley Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Longleaf and Keeley is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Longleaf Partners Fund 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 Longleaf Partners 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 Longleaf Partners Fund 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 Longleaf Partners i.e., Longleaf Partners and Keeley Small go up and down completely randomly.
Pair Corralation between Longleaf Partners and Keeley Small
Assuming the 90 days horizon Longleaf Partners is expected to generate 10.71 times less return on investment than Keeley Small. But when comparing it to its historical volatility, Longleaf Partners Fund is 1.99 times less risky than Keeley Small. It trades about 0.05 of its potential returns per unit of risk. Keeley Small Cap is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,840 in Keeley Small Cap on August 29, 2024 and sell it today you would earn a total of 159.00 from holding Keeley Small Cap or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longleaf Partners Fund vs. Keeley Small Cap
Performance |
| Timeline |
| Longleaf Partners |
| Keeley Small Cap |
Longleaf Partners and Keeley Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longleaf Partners and Keeley Small
The main advantage of trading using opposite Longleaf Partners and Keeley Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longleaf Partners 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.| Longleaf Partners vs. Longleaf Partners Global | Longleaf Partners vs. Longleaf Partners Small Cap | Longleaf Partners vs. Northern Institutional Funds | Longleaf Partners vs. Dreyfus Yield Enhancement |
| Keeley Small vs. Queens Road Small | Keeley Small vs. Applied Finance Explorer | Keeley Small vs. Amg River Road | Keeley Small vs. Pace Smallmedium Value |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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