Correlation Between Vanguard Mid-cap and Keeley Mid
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid-cap and Keeley Mid 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 Vanguard Mid-cap and Keeley Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Mid Cap Value and Keeley Mid Cap, you can compare the effects of market volatilities on Vanguard Mid-cap and Keeley Mid 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 Vanguard Mid-cap with a short position of Keeley Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid-cap and Keeley Mid.
Diversification Opportunities for Vanguard Mid-cap and Keeley Mid
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Keeley is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Value and Keeley Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keeley Mid Cap and Vanguard Mid-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 Vanguard Mid Cap Value are associated (or correlated) with Keeley Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keeley Mid Cap has no effect on the direction of Vanguard Mid-cap i.e., Vanguard Mid-cap and Keeley Mid go up and down completely randomly.
Pair Corralation between Vanguard Mid-cap and Keeley Mid
Assuming the 90 days horizon Vanguard Mid-cap is expected to generate 1.16 times less return on investment than Keeley Mid. But when comparing it to its historical volatility, Vanguard Mid Cap Value is 1.51 times less risky than Keeley Mid. It trades about 0.4 of its potential returns per unit of risk. Keeley Mid Cap is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 3,170 in Keeley Mid Cap on September 1, 2024 and sell it today you would earn a total of 237.00 from holding Keeley Mid Cap or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Mid Cap Value vs. Keeley Mid Cap
Performance |
| Timeline |
| Vanguard Mid Cap |
| Keeley Mid Cap |
Vanguard Mid-cap and Keeley Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mid-cap and Keeley Mid
The main advantage of trading using opposite Vanguard Mid-cap and Keeley Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid-cap position performs unexpectedly, Keeley Mid 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 Mid will offset losses from the drop in Keeley Mid's long position.| Vanguard Mid-cap vs. Vanguard Small Cap Value | Vanguard Mid-cap vs. Vanguard Mid Cap Growth | Vanguard Mid-cap vs. Vanguard Value Index | Vanguard Mid-cap vs. Vanguard Small Cap Growth |
| Keeley Mid vs. Siit Emerging Markets | Keeley Mid vs. Shelton Emerging Markets | Keeley Mid vs. Calvert Developed Market | Keeley Mid vs. Transamerica Emerging Markets |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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