Correlation Between Boston Partners and Litman Gregory
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Litman Gregory 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 Litman Gregory 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 Litman Gregory Masters, you can compare the effects of market volatilities on Boston Partners and Litman Gregory 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 Litman Gregory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Litman Gregory.
Diversification Opportunities for Boston Partners and Litman Gregory
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Boston and Litman is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Longshort and Litman Gregory Masters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litman Gregory Masters 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 Litman Gregory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litman Gregory Masters has no effect on the direction of Boston Partners i.e., Boston Partners and Litman Gregory go up and down completely randomly.
Pair Corralation between Boston Partners and Litman Gregory
Assuming the 90 days horizon Boston Partners Longshort is expected to under-perform the Litman Gregory. In addition to that, Boston Partners is 10.23 times more volatile than Litman Gregory Masters. It trades about -0.18 of its total potential returns per unit of risk. Litman Gregory Masters is currently generating about 0.12 per unit of volatility. If you would invest 1,078 in Litman Gregory Masters on October 23, 2024 and sell it today you would earn a total of 8.00 from holding Litman Gregory Masters or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Longshort vs. Litman Gregory Masters
Performance |
| Timeline |
| Boston Partners Longshort |
| Litman Gregory Masters |
Boston Partners and Litman Gregory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Litman Gregory
The main advantage of trading using opposite Boston Partners and Litman Gregory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Litman Gregory 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 Litman Gregory will offset losses from the drop in Litman Gregory's long position.| Boston Partners vs. Marketfield Fund Marketfield | Boston Partners vs. Boston Partners Longshort | Boston Partners vs. Boston Partners Longshort | Boston Partners vs. Neuberger Berman Long |
| Litman Gregory vs. Litman Gregory Masters | Litman Gregory vs. Aqr Managed Futures | Litman Gregory vs. Boston Partners Longshort | Litman Gregory vs. Artisan Global Value |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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