Correlation Between Vanguard Wellington and Keeley Small-mid
Can any of the company-specific risk be diversified away by investing in both Vanguard Wellington and Keeley Small-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 Wellington and Keeley Small-mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Wellington Fund and Keeley Small Mid Cap, you can compare the effects of market volatilities on Vanguard Wellington and Keeley Small-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 Wellington with a short position of Keeley Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Wellington and Keeley Small-mid.
Diversification Opportunities for Vanguard Wellington and Keeley Small-mid
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Keeley is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Wellington Fund and Keeley Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keeley Small Mid and Vanguard Wellington 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 Wellington Fund are associated (or correlated) with Keeley Small-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 Small Mid has no effect on the direction of Vanguard Wellington i.e., Vanguard Wellington and Keeley Small-mid go up and down completely randomly.
Pair Corralation between Vanguard Wellington and Keeley Small-mid
Assuming the 90 days horizon Vanguard Wellington is expected to generate 3.26 times less return on investment than Keeley Small-mid. But when comparing it to its historical volatility, Vanguard Wellington Fund is 2.01 times less risky than Keeley Small-mid. It trades about 0.19 of its potential returns per unit of risk. Keeley Small Mid Cap is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Keeley Small Mid Cap on August 29, 2024 and sell it today you would earn a total of 83.00 from holding Keeley Small Mid Cap or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Wellington Fund vs. Keeley Small Mid Cap
Performance |
| Timeline |
| Vanguard Wellington |
| Keeley Small Mid |
Vanguard Wellington and Keeley Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Wellington and Keeley Small-mid
The main advantage of trading using opposite Vanguard Wellington and Keeley Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Wellington position performs unexpectedly, Keeley Small-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 Small-mid will offset losses from the drop in Keeley Small-mid's long position.| Vanguard Wellington vs. Vanguard Wellesley Income | Vanguard Wellington vs. Vanguard Windsor Ii | Vanguard Wellington vs. Vanguard International Growth | Vanguard Wellington vs. Vanguard Primecap Fund |
| Keeley Small-mid vs. Artisan Select Equity | Keeley Small-mid vs. Gmo Global Equity | Keeley Small-mid vs. Gmo Equity Allocation | Keeley Small-mid vs. Ultra Short Term Fixed |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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