Correlation Between Boston Trust and Walden Asset
Can any of the company-specific risk be diversified away by investing in both Boston Trust and Walden Asset 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 Asset 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 Asset Management, you can compare the effects of market volatilities on Boston Trust and Walden Asset 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 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and Walden Asset.
Diversification Opportunities for Boston Trust and Walden Asset
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Walden is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Asset and Walden Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Asset Management 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 Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Asset Management has no effect on the direction of Boston Trust i.e., Boston Trust and Walden Asset go up and down completely randomly.
Pair Corralation between Boston Trust and Walden Asset
Assuming the 90 days horizon Boston Trust Asset is expected to generate 0.85 times more return on investment than Walden Asset. However, Boston Trust Asset is 1.18 times less risky than Walden Asset. It trades about 0.13 of its potential returns per unit of risk. Walden Asset Management is currently generating about 0.05 per unit of risk. If you would invest 5,483 in Boston Trust Asset on August 25, 2024 and sell it today you would earn a total of 1,168 from holding Boston Trust Asset or generate 21.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Trust Asset vs. Walden Asset Management
Performance |
| Timeline |
| Boston Trust Asset |
| Walden Asset Management |
Boston Trust and Walden Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Trust and Walden Asset
The main advantage of trading using opposite Boston Trust and Walden Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Trust position performs unexpectedly, Walden Asset 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 Asset will offset losses from the drop in Walden Asset's long position.| Boston Trust vs. Walden Asset Management | Boston Trust vs. Boston Trust Midcap | Boston Trust vs. Boston Trust Equity | Boston Trust vs. Boston Trust Small |
| Walden Asset vs. Walden Equity Fund | Walden Asset vs. Boston Trust Asset | Walden Asset vs. Ab Centrated Growth | Walden Asset vs. Boston Trust Midcap |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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