Correlation Between Transamerica Intermediate and Keeley International
Can any of the company-specific risk be diversified away by investing in both Transamerica Intermediate and Keeley International 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 Transamerica Intermediate and Keeley International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Intermediate Muni and Keeley International Small, you can compare the effects of market volatilities on Transamerica Intermediate and Keeley International 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 Transamerica Intermediate with a short position of Keeley International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Intermediate and Keeley International.
Diversification Opportunities for Transamerica Intermediate and Keeley International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Transamerica and Keeley is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Intermediate Muni and Keeley International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keeley International and Transamerica Intermediate 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 Transamerica Intermediate Muni are associated (or correlated) with Keeley International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keeley International has no effect on the direction of Transamerica Intermediate i.e., Transamerica Intermediate and Keeley International go up and down completely randomly.
Pair Corralation between Transamerica Intermediate and Keeley International
If you would invest 1,073 in Transamerica Intermediate Muni on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Transamerica Intermediate Muni or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Transamerica Intermediate Muni vs. Keeley International Small
Performance |
| Timeline |
| Transamerica Intermediate |
| Keeley International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Transamerica Intermediate and Keeley International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Intermediate and Keeley International
The main advantage of trading using opposite Transamerica Intermediate and Keeley International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Intermediate position performs unexpectedly, Keeley International 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 International will offset losses from the drop in Keeley International's long position.The idea behind Transamerica Intermediate Muni and Keeley International Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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