Correlation Between Boston Partners and Sp 500
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Sp 500 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 Sp 500 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 Sp 500 2x, you can compare the effects of market volatilities on Boston Partners and Sp 500 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 Sp 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Sp 500.
Diversification Opportunities for Boston Partners and Sp 500
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boston and RYTTX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Sp 500 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp 500 2x 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 Sp 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp 500 2x has no effect on the direction of Boston Partners i.e., Boston Partners and Sp 500 go up and down completely randomly.
Pair Corralation between Boston Partners and Sp 500
Assuming the 90 days horizon Boston Partners is expected to generate 3.18 times less return on investment than Sp 500. But when comparing it to its historical volatility, Boston Partners Small is 1.33 times less risky than Sp 500. It trades about 0.04 of its potential returns per unit of risk. Sp 500 2x is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 17,920 in Sp 500 2x on September 2, 2024 and sell it today you would earn a total of 18,151 from holding Sp 500 2x or generate 101.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Small vs. Sp 500 2x
Performance |
| Timeline |
| Boston Partners Small |
| Sp 500 2x |
Boston Partners and Sp 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Sp 500
The main advantage of trading using opposite Boston Partners and Sp 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Sp 500 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 Sp 500 will offset losses from the drop in Sp 500'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 |
| Sp 500 vs. Nasdaq 100 2x Strategy | Sp 500 vs. Direxion Monthly Nasdaq 100 | Sp 500 vs. Ultranasdaq 100 Profund Ultranasdaq 100 | Sp 500 vs. Nasdaq 100 2x Strategy |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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