Correlation Between Boston Mon and Boston Partners
Can any of the company-specific risk be diversified away by investing in both Boston Mon 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 Mon 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 Small, you can compare the effects of market volatilities on Boston Mon 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 Mon with a short position of Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Mon and Boston Partners.
Diversification Opportunities for Boston Mon and Boston Partners
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boston and Boston is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Boston Mon International and Boston Partners Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Small and Boston Mon 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 Small has no effect on the direction of Boston Mon i.e., Boston Mon and Boston Partners go up and down completely randomly.
Pair Corralation between Boston Mon and Boston Partners
Assuming the 90 days horizon Boston Mon International is expected to generate 0.71 times more return on investment than Boston Partners. However, Boston Mon International is 1.41 times less risky than Boston Partners. It trades about 0.13 of its potential returns per unit of risk. Boston Partners Small is currently generating about 0.06 per unit of risk. If you would invest 3,256 in Boston Mon International on September 13, 2024 and sell it today you would earn a total of 52.00 from holding Boston Mon International or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Mon International vs. Boston Partners Small
Performance |
| Timeline |
| Boston Mon International |
| Boston Partners Small |
Boston Mon and Boston Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Mon and Boston Partners
The main advantage of trading using opposite Boston Mon and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Mon 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 Mon vs. Transamerica Financial Life | Boston Mon vs. Angel Oak Financial | Boston Mon vs. Gabelli Global Financial | Boston Mon vs. Icon Financial Fund |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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