Correlation Between Keeley Mid and Victory Sycamore

Can any of the company-specific risk be diversified away by investing in both Keeley Mid and Victory Sycamore 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 Keeley Mid and Victory Sycamore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Keeley Mid Cap and Victory Sycamore Established, you can compare the effects of market volatilities on Keeley Mid and Victory Sycamore 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 Keeley Mid with a short position of Victory Sycamore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keeley Mid and Victory Sycamore.

Diversification Opportunities for Keeley Mid and Victory Sycamore

0.88

Correlation Coefficient

Keeley Mid  Victory Sycamore

Very poor diversification

The 3 months correlation between Keeley and Victory is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Keeley Mid Cap and Victory Sycamore Established in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Sycamore Est and Keeley Mid 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 Keeley Mid Cap are associated (or correlated) with Victory Sycamore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Sycamore Est has no effect on the direction of Keeley Mid i.e., Keeley Mid and Victory Sycamore go up and down completely randomly.

Pair Corralation between Keeley Mid and Victory Sycamore

Assuming the 90 days horizon Keeley Mid Cap is expected to generate 1.25 times more return on investment than Victory Sycamore. However, Keeley Mid is 1.25 times more volatile than Victory Sycamore Established. It trades about 0.22 of its potential returns per unit of risk. Victory Sycamore Established is currently generating about 0.13 per unit of risk. If you would invest  3,030  in Keeley Mid Cap on September 4, 2024 and sell it today you would earn a total of  385.00  from holding Keeley Mid Cap or generate 12.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Keeley Mid Cap  vs.  Victory Sycamore Established

Keeley Mid Cap

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Keeley Mid Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Keeley Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Victory Sycamore Est

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Sycamore Established are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Victory Sycamore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Keeley Mid and Victory Sycamore

The main advantage of trading using opposite Keeley Mid and Victory Sycamore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keeley Mid position performs unexpectedly, Victory Sycamore 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 Victory Sycamore will offset losses from the drop in Victory Sycamore's long position.

The idea behind Keeley Mid Cap and Victory Sycamore Established 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.