Correlation Between Boston Partners and Boston Common
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Boston Common 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 Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Global and Boston Mon International, you can compare the effects of market volatilities on Boston Partners and Boston Common 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 Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Boston Common.
Diversification Opportunities for Boston Partners and Boston Common
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boston and Boston is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Global and Boston Mon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Mon International 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 Global are associated (or correlated) with Boston Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Mon International has no effect on the direction of Boston Partners i.e., Boston Partners and Boston Common go up and down completely randomly.
Pair Corralation between Boston Partners and Boston Common
Assuming the 90 days horizon Boston Partners is expected to generate 1.35 times less return on investment than Boston Common. But when comparing it to its historical volatility, Boston Partners Global is 1.52 times less risky than Boston Common. It trades about 0.04 of its potential returns per unit of risk. Boston Mon International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,885 in Boston Mon International on August 29, 2024 and sell it today you would earn a total of 371.00 from holding Boston Mon International or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Global vs. Boston Mon International
Performance |
| Timeline |
| Boston Partners Global |
| Boston Mon International |
Boston Partners and Boston Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Boston Common
The main advantage of trading using opposite Boston Partners and Boston Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Boston Common 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 Common will offset losses from the drop in Boston Common's long position.| Boston Partners vs. Otter Creek Longshort | Boston Partners vs. Pimco Trends Managed | Boston Partners vs. Boston Partners Longshort | Boston Partners vs. Asg Managed Futures |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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