Correlation Between Boston Common and Boston Partners
Can any of the company-specific risk be diversified away by investing in both Boston Common 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 Boston Common and Boston Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Mon International and Boston Partners Global, you can compare the effects of market volatilities on Boston Common 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 Boston Common with a short position of Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Common and Boston Partners.
Diversification Opportunities for Boston Common and Boston Partners
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boston and Boston is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Boston Mon International and Boston Partners Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Global and Boston Common 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 Boston Mon International 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 Global has no effect on the direction of Boston Common i.e., Boston Common and Boston Partners go up and down completely randomly.
Pair Corralation between Boston Common and Boston Partners
Assuming the 90 days horizon Boston Common is expected to generate 1.8 times less return on investment than Boston Partners. In addition to that, Boston Common is 1.18 times more volatile than Boston Partners Global. It trades about 0.03 of its total potential returns per unit of risk. Boston Partners Global is currently generating about 0.06 per unit of volatility. If you would invest 2,302 in Boston Partners Global on September 1, 2024 and sell it today you would earn a total of 197.00 from holding Boston Partners Global or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Mon International vs. Boston Partners Global
Performance |
| Timeline |
| Boston Mon International |
| Boston Partners Global |
Boston Common and Boston Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Common and Boston Partners
The main advantage of trading using opposite Boston Common and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Common 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.| Boston Common vs. Boston Mon Equity | Boston Common vs. Boston Common Esg | Boston Common vs. Fidelity Select Semiconductors | Boston Common vs. Russell 2000 2x |
| Boston Partners vs. Boston Partners Emerging | Boston Partners vs. Boston Partners Global | Boston Partners vs. Boston Partners Global | Boston Partners vs. Rbb Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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