Correlation Between Alternative Credit and Keeley Small
Can any of the company-specific risk be diversified away by investing in both Alternative Credit 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 Alternative Credit and Keeley Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Credit Income and Keeley Small Cap, you can compare the effects of market volatilities on Alternative Credit 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 Alternative Credit with a short position of Keeley Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Credit and Keeley Small.
Diversification Opportunities for Alternative Credit and Keeley Small
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alternative and Keeley is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Credit Income 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 Alternative Credit 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 Alternative Credit Income 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 Alternative Credit i.e., Alternative Credit and Keeley Small go up and down completely randomly.
Pair Corralation between Alternative Credit and Keeley Small
Assuming the 90 days horizon Alternative Credit is expected to generate 40.47 times less return on investment than Keeley Small. But when comparing it to its historical volatility, Alternative Credit Income is 17.94 times less risky than Keeley Small. It trades about 0.12 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 1,820 in Keeley Small Cap on August 25, 2024 and sell it today you would earn a total of 162.00 from holding Keeley Small Cap or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alternative Credit Income vs. Keeley Small Cap
Performance |
| Timeline |
| Alternative Credit Income |
| Keeley Small Cap |
Alternative Credit and Keeley Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Credit and Keeley Small
The main advantage of trading using opposite Alternative Credit and Keeley Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Credit 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.| Alternative Credit vs. Vanguard Total Stock | Alternative Credit vs. Vanguard 500 Index | Alternative Credit vs. Vanguard Total Stock | Alternative Credit vs. Vanguard Total Stock |
| Keeley Small vs. Keeley Mid Cap | Keeley Small vs. Keeley Mid Cap | Keeley Small vs. Keeley Small Mid Cap | Keeley Small vs. Keeley Small Mid Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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