Correlation Between Boston Partners and Eventide Healthcare
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Eventide Healthcare 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 Eventide Healthcare 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 Eventide Healthcare Life, you can compare the effects of market volatilities on Boston Partners and Eventide Healthcare 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 Eventide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Eventide Healthcare.
Diversification Opportunities for Boston Partners and Eventide Healthcare
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boston and Eventide is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Eventide Healthcare Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Healthcare Life 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 Eventide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Healthcare Life has no effect on the direction of Boston Partners i.e., Boston Partners and Eventide Healthcare go up and down completely randomly.
Pair Corralation between Boston Partners and Eventide Healthcare
Assuming the 90 days horizon Boston Partners Small is expected to generate 0.82 times more return on investment than Eventide Healthcare. However, Boston Partners Small is 1.22 times less risky than Eventide Healthcare. It trades about 0.04 of its potential returns per unit of risk. Eventide Healthcare Life is currently generating about 0.02 per unit of risk. If you would invest 2,364 in Boston Partners Small on September 13, 2024 and sell it today you would earn a total of 554.00 from holding Boston Partners Small or generate 23.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Small vs. Eventide Healthcare Life
Performance |
| Timeline |
| Boston Partners Small |
| Eventide Healthcare Life |
Boston Partners and Eventide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Eventide Healthcare
The main advantage of trading using opposite Boston Partners and Eventide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Eventide Healthcare 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 Eventide Healthcare will offset losses from the drop in Eventide Healthcare's long position.| Boston Partners vs. Aggressive Investors 1 | Boston Partners vs. Buffalo Small Cap | Boston Partners vs. Putnam Small Cap | Boston Partners vs. Dreyfus Strategic Value |
| Eventide Healthcare vs. Falcon Focus Scv | Eventide Healthcare vs. Qs Large Cap | Eventide Healthcare vs. Materials Portfolio Fidelity | Eventide Healthcare vs. Iaadx |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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