Correlation Between Arbitrage Fund and Boston Partners
Can any of the company-specific risk be diversified away by investing in both Arbitrage Fund and Boston Partners 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 Arbitrage Fund and Boston Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Arbitrage Fund and Boston Partners Longshort, you can compare the effects of market volatilities on Arbitrage Fund and Boston Partners 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 Arbitrage Fund with a short position of Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbitrage Fund and Boston Partners.
Diversification Opportunities for Arbitrage Fund and Boston Partners
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arbitrage and Boston is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Fund and Boston Partners Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Longshort and Arbitrage Fund 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 The Arbitrage Fund are associated (or correlated) with Boston Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Partners Longshort has no effect on the direction of Arbitrage Fund i.e., Arbitrage Fund and Boston Partners go up and down completely randomly.
Pair Corralation between Arbitrage Fund and Boston Partners
Assuming the 90 days horizon The Arbitrage Fund is expected to under-perform the Boston Partners. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Arbitrage Fund is 1.91 times less risky than Boston Partners. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Boston Partners Longshort is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,198 in Boston Partners Longshort on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Boston Partners Longshort or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Arbitrage Fund vs. Boston Partners Longshort
Performance |
| Timeline |
| Arbitrage Fund |
| Boston Partners Longshort |
Arbitrage Fund and Boston Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbitrage Fund and Boston Partners
The main advantage of trading using opposite Arbitrage Fund and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbitrage Fund position performs unexpectedly, Boston Partners 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 Boston Partners will offset losses from the drop in Boston Partners' long position.| Arbitrage Fund vs. The Merger Fund | Arbitrage Fund vs. Calamos Market Neutral | Arbitrage Fund vs. Hussman Strategic Growth | Arbitrage Fund vs. Gateway Fund Class |
| Boston Partners vs. Boston Partners Longshort | Boston Partners vs. Blackrock Midcap Index | Boston Partners vs. The Arbitrage Fund | Boston Partners vs. Calamos Market Neutral |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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