Correlation Between Boston Trust and Lkcm Equity
Can any of the company-specific risk be diversified away by investing in both Boston Trust and Lkcm Equity 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 Trust and Lkcm Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Trust Asset and Lkcm Equity Fund, you can compare the effects of market volatilities on Boston Trust and Lkcm Equity 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 Trust with a short position of Lkcm Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and Lkcm Equity.
Diversification Opportunities for Boston Trust and Lkcm Equity
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boston and Lkcm is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Asset and Lkcm Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Equity Fund and Boston Trust 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 Trust Asset are associated (or correlated) with Lkcm Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Equity Fund has no effect on the direction of Boston Trust i.e., Boston Trust and Lkcm Equity go up and down completely randomly.
Pair Corralation between Boston Trust and Lkcm Equity
Assuming the 90 days horizon Boston Trust is expected to generate 1.36 times less return on investment than Lkcm Equity. But when comparing it to its historical volatility, Boston Trust Asset is 1.46 times less risky than Lkcm Equity. It trades about 0.11 of its potential returns per unit of risk. Lkcm Equity Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,221 in Lkcm Equity Fund on September 2, 2024 and sell it today you would earn a total of 962.00 from holding Lkcm Equity Fund or generate 29.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Trust Asset vs. Lkcm Equity Fund
Performance |
| Timeline |
| Boston Trust Asset |
| Lkcm Equity Fund |
Boston Trust and Lkcm Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Trust and Lkcm Equity
The main advantage of trading using opposite Boston Trust and Lkcm Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Trust position performs unexpectedly, Lkcm Equity 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 Lkcm Equity will offset losses from the drop in Lkcm Equity's long position.| Boston Trust vs. Walden Asset Management | Boston Trust vs. Boston Trust Midcap | Boston Trust vs. Boston Trust Small | Boston Trust vs. Invesco Disciplined Equity |
| Lkcm Equity vs. T Rowe Price | Lkcm Equity vs. Legg Mason Bw | Lkcm Equity vs. Tax Managed Large Cap | Lkcm Equity vs. T Rowe Price |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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