Correlation Between Mirova Global and Keeley Small

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

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

Diversification Opportunities for Mirova Global and Keeley Small

0.71

Correlation Coefficient

Mirova Global  Keeley Small

Poor diversification

The 3 months correlation between Mirova and Keeley is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mirova Global Green 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 Mirova Global 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 Mirova Global Green 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 Mirova Global i.e., Mirova Global and Keeley Small go up and down completely randomly.

Pair Corralation between Mirova Global and Keeley Small

Assuming the 90 days horizon Mirova Global is expected to generate 2.5 times less return on investment than Keeley Small. But when comparing it to its historical volatility, Mirova Global Green is 3.46 times less risky than Keeley Small. It trades about 0.03 of its potential returns per unit of risk. Keeley Small Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,532  in Keeley Small Cap on October 9, 2024 and sell it today you would earn a total of  147.00  from holding Keeley Small Cap or generate 9.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Mirova Global Green  vs.  Keeley Small Cap

Mirova Global Green

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirova Global Green has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mirova Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Keeley Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keeley Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Mirova Global and Keeley Small

The main advantage of trading using opposite Mirova Global and Keeley Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirova Global 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.

The idea behind Mirova Global Green and Keeley Small Cap 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.