Correlation Between Boston Partners and Icon Long/short
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Icon Long/short 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 Icon Long/short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Longshort and Icon Longshort Fund, you can compare the effects of market volatilities on Boston Partners and Icon Long/short 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 Icon Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Icon Long/short.
Diversification Opportunities for Boston Partners and Icon Long/short
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boston and Icon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Longshort and Icon Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Long/short 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 Longshort are associated (or correlated) with Icon Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Long/short has no effect on the direction of Boston Partners i.e., Boston Partners and Icon Long/short go up and down completely randomly.
Pair Corralation between Boston Partners and Icon Long/short
Assuming the 90 days horizon Boston Partners is expected to generate 3.04 times less return on investment than Icon Long/short. But when comparing it to its historical volatility, Boston Partners Longshort is 2.73 times less risky than Icon Long/short. It trades about 0.24 of its potential returns per unit of risk. Icon Longshort Fund is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,877 in Icon Longshort Fund on August 29, 2024 and sell it today you would earn a total of 259.00 from holding Icon Longshort Fund or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Longshort vs. Icon Longshort Fund
Performance |
| Timeline |
| Boston Partners Longshort |
| Icon Long/short |
Boston Partners and Icon Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Icon Long/short
The main advantage of trading using opposite Boston Partners and Icon Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Icon Long/short 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 Icon Long/short will offset losses from the drop in Icon Long/short's long position.| Boston Partners vs. Aqr Managed Futures | Boston Partners vs. Neuberger Berman Long | Boston Partners vs. Asg Managed Futures | Boston Partners vs. Marketfield Fund Marketfield |
| Icon Long/short vs. Boston Partners Longshort | Icon Long/short vs. Diamond Hill Long Short | Icon Long/short vs. Jpmorgan Research Market | Icon Long/short vs. Calamos Market Neutral |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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