Correlation Between Boston Partners and Boston Trust
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Boston Trust 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 Trust 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 Trust Equity, you can compare the effects of market volatilities on Boston Partners and Boston Trust 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 Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Boston Trust.
Diversification Opportunities for Boston Partners and Boston Trust
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Boston is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners All Cap and Boston Trust Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Trust Equity 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 Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Trust Equity has no effect on the direction of Boston Partners i.e., Boston Partners and Boston Trust go up and down completely randomly.
Pair Corralation between Boston Partners and Boston Trust
Assuming the 90 days horizon Boston Partners is expected to generate 1.18 times less return on investment than Boston Trust. In addition to that, Boston Partners is 1.19 times more volatile than Boston Trust Equity. It trades about 0.1 of its total potential returns per unit of risk. Boston Trust Equity is currently generating about 0.14 per unit of volatility. If you would invest 4,211 in Boston Trust Equity on August 29, 2024 and sell it today you would earn a total of 506.00 from holding Boston Trust Equity or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners All Cap vs. Boston Trust Equity
Performance |
| Timeline |
| Boston Partners All |
| Boston Trust Equity |
Boston Partners and Boston Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Boston Trust
The main advantage of trading using opposite Boston Partners and Boston Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Boston Trust 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 Trust will offset losses from the drop in Boston Trust'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 Trust vs. Boston Trust Asset | Boston Trust vs. Boston Trust Small | Boston Trust vs. Walden Asset Management | Boston Trust vs. Diamond Hill Select |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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