Correlation Between Boston Partners and Large Cap
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Large Cap 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 Large Cap 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 Large Cap Value, you can compare the effects of market volatilities on Boston Partners and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Large Cap.
Diversification Opportunities for Boston Partners and Large Cap
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Boston and Large is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Boston Partners i.e., Boston Partners and Large Cap go up and down completely randomly.
Pair Corralation between Boston Partners and Large Cap
Assuming the 90 days horizon Boston Partners Small is expected to generate 0.87 times more return on investment than Large Cap. However, Boston Partners Small is 1.15 times less risky than Large Cap. It trades about 0.07 of its potential returns per unit of risk. Large Cap Value is currently generating about -0.01 per unit of risk. If you would invest 2,422 in Boston Partners Small on September 14, 2024 and sell it today you would earn a total of 478.00 from holding Boston Partners Small or generate 19.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Boston Partners Small vs. Large Cap Value
Performance |
| Timeline |
| Boston Partners Small |
| Large Cap Value |
Boston Partners and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Large Cap
The main advantage of trading using opposite Boston Partners and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap'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 |
| Large Cap vs. Salient Alternative Beta | Large Cap vs. Aggressive Balanced Allocation | Large Cap vs. Salient Alternative Beta | Large Cap vs. Moderately Aggressive Balanced |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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