Correlation Between Boston Partners and Equity Income
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Equity Income 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 Equity Income 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 Equity Income Fund, you can compare the effects of market volatilities on Boston Partners and Equity Income 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 Equity Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Equity Income.
Diversification Opportunities for Boston Partners and Equity Income
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Equity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Equity Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Income 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 Equity Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Income has no effect on the direction of Boston Partners i.e., Boston Partners and Equity Income go up and down completely randomly.
Pair Corralation between Boston Partners and Equity Income
Assuming the 90 days horizon Boston Partners Small is expected to generate 0.5 times more return on investment than Equity Income. However, Boston Partners Small is 2.01 times less risky than Equity Income. It trades about 0.16 of its potential returns per unit of risk. Equity Income Fund is currently generating about -0.11 per unit of risk. If you would invest 2,404 in Boston Partners Small on October 20, 2024 and sell it today you would earn a total of 67.00 from holding Boston Partners Small or generate 2.79% 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 Small vs. Equity Income Fund
Performance |
| Timeline |
| Boston Partners Small |
| Equity Income |
Boston Partners and Equity Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Equity Income
The main advantage of trading using opposite Boston Partners and Equity Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Equity Income 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 Equity Income will offset losses from the drop in Equity Income'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 |
| Equity Income vs. Asg Global Alternatives | Equity Income vs. Rbb Fund Trust | Equity Income vs. Gmo Global Equity | Equity Income vs. Kinetics Global Fund |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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