Correlation Between Redwood Systematic and Keeley Small
Can any of the company-specific risk be diversified away by investing in both Redwood Systematic 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 Redwood Systematic and Keeley Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redwood Systematic Macro and Keeley Small Cap, you can compare the effects of market volatilities on Redwood Systematic 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 Redwood Systematic with a short position of Keeley Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redwood Systematic and Keeley Small.
Diversification Opportunities for Redwood Systematic and Keeley Small
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Redwood and Keeley is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Redwood Systematic Macro 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 Redwood Systematic 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 Redwood Systematic Macro 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 Redwood Systematic i.e., Redwood Systematic and Keeley Small go up and down completely randomly.
Pair Corralation between Redwood Systematic and Keeley Small
Assuming the 90 days horizon Redwood Systematic is expected to generate 1.94 times less return on investment than Keeley Small. But when comparing it to its historical volatility, Redwood Systematic Macro is 1.54 times less risky than Keeley Small. It trades about 0.22 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Redwood Systematic Macro vs. Keeley Small Cap
Performance |
| Timeline |
| Redwood Systematic Macro |
| Keeley Small Cap |
Redwood Systematic and Keeley Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redwood Systematic and Keeley Small
The main advantage of trading using opposite Redwood Systematic and Keeley Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redwood Systematic 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.| Redwood Systematic vs. Redwood Managed Volatility | Redwood Systematic vs. Redwood Managed Volatility | Redwood Systematic vs. Redwood Managed Volatility | Redwood Systematic vs. Redwood Alphafactor Tactical |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |