Correlation Between Boston Trust and Polen Us
Can any of the company-specific risk be diversified away by investing in both Boston Trust and Polen Us 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 Polen Us 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 Polen Smid, you can compare the effects of market volatilities on Boston Trust and Polen Us 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 Polen Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and Polen Us.
Diversification Opportunities for Boston Trust and Polen Us
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Polen is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Small and Polen Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Smid 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 Polen Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Smid has no effect on the direction of Boston Trust i.e., Boston Trust and Polen Us go up and down completely randomly.
Pair Corralation between Boston Trust and Polen Us
Assuming the 90 days horizon Boston Trust is expected to generate 1.3 times less return on investment than Polen Us. In addition to that, Boston Trust is 1.11 times more volatile than Polen Smid. It trades about 0.25 of its total potential returns per unit of risk. Polen Smid is currently generating about 0.36 per unit of volatility. If you would invest 801.00 in Polen Smid on August 30, 2024 and sell it today you would earn a total of 93.00 from holding Polen Smid or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Boston Trust Small vs. Polen Smid
Performance |
| Timeline |
| Boston Trust Small |
| Polen Smid |
Boston Trust and Polen Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Trust and Polen Us
The main advantage of trading using opposite Boston Trust and Polen Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Trust position performs unexpectedly, Polen Us 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 Polen Us will offset losses from the drop in Polen Us' 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 |
| Polen Us vs. Prnpl Inv Fd | Polen Us vs. Polen Global Growth | Polen Us vs. Polen Global Growth | Polen Us vs. Polen International Growth |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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