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 All Cap 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
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BOSTON and Boston is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners All Cap 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 All Cap 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 All Cap is expected to generate 1.22 times more return on investment than Boston Common. However, Boston Partners is 1.22 times more volatile than Boston Mon International. It trades about 0.25 of its potential returns per unit of risk. Boston Mon International is currently generating about -0.01 per unit of risk. If you would invest 3,365 in Boston Partners All Cap on September 1, 2024 and sell it today you would earn a total of 165.00 from holding Boston Partners All Cap or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Boston Partners All Cap vs. Boston Mon International
Performance |
| Timeline |
| Boston Partners All |
| 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. Boston Partners All Cap | Boston Partners vs. Parnassus Equity Incme | Boston Partners vs. Boston Partners Small | Boston Partners vs. Diamond Hill Large |
| Boston Common vs. Boston Mon Equity | Boston Common vs. Boston Common Esg | Boston Common vs. Fidelity Select Semiconductors | Boston Common vs. Russell 2000 2x |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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