Correlation Between Boston Partners and High Yield
Can any of the company-specific risk be diversified away by investing in both Boston Partners and High Yield 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 High Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Small and High Yield Fund, you can compare the effects of market volatilities on Boston Partners and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and High Yield.
Diversification Opportunities for Boston Partners and High Yield
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and High is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 Small are associated (or correlated) with High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Boston Partners i.e., Boston Partners and High Yield go up and down completely randomly.
Pair Corralation between Boston Partners and High Yield
Assuming the 90 days horizon Boston Partners Small is expected to generate 10.27 times more return on investment than High Yield. However, Boston Partners is 10.27 times more volatile than High Yield Fund. It trades about 0.31 of its potential returns per unit of risk. High Yield Fund is currently generating about 0.18 per unit of risk. If you would invest 2,672 in Boston Partners Small on September 2, 2024 and sell it today you would earn a total of 286.00 from holding Boston Partners Small or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Small vs. High Yield Fund
Performance |
| Timeline |
| Boston Partners Small |
| High Yield Fund |
Boston Partners and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and High Yield
The main advantage of trading using opposite Boston Partners and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Boston Partners vs. Aggressive Investors 1 | Boston Partners vs. Buffalo Small Cap | Boston Partners vs. Rice Hall James | Boston Partners vs. Putnam Small Cap |
| High Yield vs. Icon Natural Resources | High Yield vs. Dreyfus Natural Resources | High Yield vs. Alpsalerian Energy Infrastructure | High Yield vs. Jennison Natural Resources |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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