Correlation Between Boston Trust and Americafirst Large
Can any of the company-specific risk be diversified away by investing in both Boston Trust and Americafirst Large 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 Americafirst Large 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 Americafirst Large Cap, you can compare the effects of market volatilities on Boston Trust and Americafirst Large 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 Americafirst Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and Americafirst Large.
Diversification Opportunities for Boston Trust and Americafirst Large
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Americafirst is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Small and Americafirst Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Large Cap 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 Americafirst Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Large Cap has no effect on the direction of Boston Trust i.e., Boston Trust and Americafirst Large go up and down completely randomly.
Pair Corralation between Boston Trust and Americafirst Large
Assuming the 90 days horizon Boston Trust Small is expected to generate 1.39 times more return on investment than Americafirst Large. However, Boston Trust is 1.39 times more volatile than Americafirst Large Cap. It trades about 0.16 of its potential returns per unit of risk. Americafirst Large Cap is currently generating about 0.2 per unit of risk. If you would invest 1,905 in Boston Trust Small on August 30, 2024 and sell it today you would earn a total of 168.00 from holding Boston Trust Small or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
Boston Trust Small vs. Americafirst Large Cap
Performance |
| Timeline |
| Boston Trust Small |
| Americafirst Large Cap |
Boston Trust and Americafirst Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Trust and Americafirst Large
The main advantage of trading using opposite Boston Trust and Americafirst Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Trust position performs unexpectedly, Americafirst Large 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 Americafirst Large will offset losses from the drop in Americafirst Large'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 |
| Americafirst Large vs. Qs Large Cap | Americafirst Large vs. Dana Large Cap | Americafirst Large vs. Cb Large Cap | Americafirst Large vs. Tax Managed Large Cap |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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