Correlation Between Boston Trust and International Fund
Can any of the company-specific risk be diversified away by investing in both Boston Trust and International Fund 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 Trust and International Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Trust Small and International Fund International, you can compare the effects of market volatilities on Boston Trust and International Fund 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 Trust with a short position of International Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and International Fund.
Diversification Opportunities for Boston Trust and International Fund
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and International is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Small and International Fund Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Fund and Boston Trust 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 Trust Small are associated (or correlated) with International Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Fund has no effect on the direction of Boston Trust i.e., Boston Trust and International Fund go up and down completely randomly.
Pair Corralation between Boston Trust and International Fund
Assuming the 90 days horizon Boston Trust Small is expected to generate 1.67 times more return on investment than International Fund. However, Boston Trust is 1.67 times more volatile than International Fund International. It trades about 0.02 of its potential returns per unit of risk. International Fund International is currently generating about 0.02 per unit of risk. If you would invest 1,807 in Boston Trust Small on October 22, 2024 and sell it today you would earn a total of 35.00 from holding Boston Trust Small or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Trust Small vs. International Fund Internation
Performance |
| Timeline |
| Boston Trust Small |
| International Fund |
Boston Trust and International Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Trust and International Fund
The main advantage of trading using opposite Boston Trust and International Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Trust position performs unexpectedly, International Fund 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 International Fund will offset losses from the drop in International Fund's long position.| Boston Trust vs. International Fund International | Boston Trust vs. Boston Trust Asset | Boston Trust vs. Queens Road Small | Boston Trust vs. Boston Trust Midcap |
| International Fund vs. Large Cap Growth | International Fund vs. Parnassus Mid Cap | International Fund vs. Parnassus E Equity | International Fund vs. Doubleline Total Return |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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