Correlation Between Boston Trust and Walden Smid
Can any of the company-specific risk be diversified away by investing in both Boston Trust and Walden Smid 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 Walden Smid 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 Walden Smid Cap, you can compare the effects of market volatilities on Boston Trust and Walden Smid 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 Walden Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and Walden Smid.
Diversification Opportunities for Boston Trust and Walden Smid
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Walden is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Asset and Walden Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Smid Cap 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 Walden Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Smid Cap has no effect on the direction of Boston Trust i.e., Boston Trust and Walden Smid go up and down completely randomly.
Pair Corralation between Boston Trust and Walden Smid
Assuming the 90 days horizon Boston Trust is expected to generate 1.31 times less return on investment than Walden Smid. But when comparing it to its historical volatility, Boston Trust Asset is 1.67 times less risky than Walden Smid. It trades about 0.1 of its potential returns per unit of risk. Walden Smid Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,991 in Walden Smid Cap on August 28, 2024 and sell it today you would earn a total of 726.00 from holding Walden Smid Cap or generate 36.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Trust Asset vs. Walden Smid Cap
Performance |
| Timeline |
| Boston Trust Asset |
| Walden Smid Cap |
Boston Trust and Walden Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Trust and Walden Smid
The main advantage of trading using opposite Boston Trust and Walden Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Trust position performs unexpectedly, Walden Smid 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 Walden Smid will offset losses from the drop in Walden Smid's long position.| Boston Trust vs. Boston Trust Midcap | Boston Trust vs. Boston Trust Equity | Boston Trust vs. Boston Trust Small | Boston Trust vs. Invesco Disciplined Equity |
| Walden Smid vs. Calvert Small Cap | Walden Smid vs. Calvert International Equity | Walden Smid vs. Champlain Mid Cap | Walden Smid vs. Aquagold International |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |