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
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Longleaf and Keeley is 0.9. 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 Fund is expected to generate 0.8 times more return on investment than Keeley Small. However, Longleaf Partners Fund is 1.26 times less risky than Keeley Small. It trades about -0.04 of its potential returns per unit of risk. Keeley Small Cap is currently generating about -0.1 per unit of risk. If you would invest 2,371 in Longleaf Partners Fund on December 11, 2024 and sell it today you would lose (31.00) from holding Longleaf Partners Fund or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very 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. Tiaa Cref Inflation Linked Bond | Longleaf Partners vs. Fidelity Sai Inflationfocused | Longleaf Partners vs. Ab Bond Inflation | Longleaf Partners vs. Ab Bond Inflation |
| Keeley Small vs. Invesco Short Duration | Keeley Small vs. Ab Bond Inflation | Keeley Small vs. Aqr Managed Futures | Keeley Small vs. Fidelity Sai Inflationfocused |
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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