Correlation Between Small Cap and Keeley Small
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Keeley Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Core and Keeley Small Cap, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Keeley Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Keeley Small.
Diversification Opportunities for Small Cap and Keeley Small
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Small and Keeley is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Core 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 Small Cap 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 Small Cap Core 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 Small Cap i.e., Small Cap and Keeley Small go up and down completely randomly.
Pair Corralation between Small Cap and Keeley Small
Assuming the 90 days horizon Small Cap is expected to generate 1.09 times less return on investment than Keeley Small. In addition to that, Small Cap is 1.18 times more volatile than Keeley Small Cap. It trades about 0.08 of its total potential returns per unit of risk. Keeley Small Cap is currently generating about 0.1 per unit of volatility. If you would invest 1,537 in Keeley Small Cap on August 29, 2024 and sell it today you would earn a total of 460.00 from holding Keeley Small Cap or generate 29.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Core vs. Keeley Small Cap
Performance |
| Timeline |
| Small Cap Core |
| Keeley Small Cap |
Small Cap and Keeley Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Keeley Small
The main advantage of trading using opposite Small Cap and Keeley Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. The National Tax Free | Small Cap vs. Ishares Municipal Bond | Small Cap vs. Franklin High Yield | Small Cap vs. Gamco Global Telecommunications |
| Keeley Small vs. Vanguard Global Credit | Keeley Small vs. The Hartford Global | Keeley Small vs. Rbb Fund Trust | Keeley Small vs. T Rowe Price |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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