Correlation Between Boston Partners and Boston Trust
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Boston Trust 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 Partners and Boston Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Emerging and Boston Trust Equity, you can compare the effects of market volatilities on Boston Partners and Boston Trust 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 Partners with a short position of Boston Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Boston Trust.
Diversification Opportunities for Boston Partners and Boston Trust
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boston and Boston is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Emerging and Boston Trust Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Trust Equity and Boston Partners 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 Partners Emerging are associated (or correlated) with Boston Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Trust Equity has no effect on the direction of Boston Partners i.e., Boston Partners and Boston Trust go up and down completely randomly.
Pair Corralation between Boston Partners and Boston Trust
Assuming the 90 days horizon Boston Partners Emerging is expected to under-perform the Boston Trust. But the mutual fund apears to be less risky and, when comparing its historical volatility, Boston Partners Emerging is 1.35 times less risky than Boston Trust. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Boston Trust Equity is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 4,488 in Boston Trust Equity on September 1, 2024 and sell it today you would earn a total of 241.00 from holding Boston Trust Equity or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Emerging vs. Boston Trust Equity
Performance |
| Timeline |
| Boston Partners Emerging |
| Boston Trust Equity |
Boston Partners and Boston Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Boston Trust
The main advantage of trading using opposite Boston Partners and Boston Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Boston Trust 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 Trust will offset losses from the drop in Boston Trust's long position.| Boston Partners vs. Boston Partners Global | Boston Partners vs. Rbb Fund | Boston Partners vs. Boston Partners All Cap | Boston Partners vs. Boston Partners All Cap |
| Boston Trust vs. Boston Trust Asset | Boston Trust vs. Boston Trust Small | Boston Trust vs. Walden Asset Management | Boston Trust vs. Diamond Hill Select |
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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