Correlation Between Boston Trust and Boston Partners
Can any of the company-specific risk be diversified away by investing in both Boston Trust and Boston Partners 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 Boston Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Trust Equity and Boston Partners All Cap, you can compare the effects of market volatilities on Boston Trust and Boston Partners 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 Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and Boston Partners.
Diversification Opportunities for Boston Trust and Boston Partners
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Boston is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Equity and Boston Partners All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners All 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 Equity are associated (or correlated) with Boston Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Partners All has no effect on the direction of Boston Trust i.e., Boston Trust and Boston Partners go up and down completely randomly.
Pair Corralation between Boston Trust and Boston Partners
Assuming the 90 days horizon Boston Trust Equity is expected to generate 0.7 times more return on investment than Boston Partners. However, Boston Trust Equity is 1.42 times less risky than Boston Partners. It trades about 0.09 of its potential returns per unit of risk. Boston Partners All Cap is currently generating about 0.06 per unit of risk. If you would invest 3,492 in Boston Trust Equity on August 29, 2024 and sell it today you would earn a total of 1,225 from holding Boston Trust Equity or generate 35.08% 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 Equity vs. Boston Partners All Cap
Performance |
| Timeline |
| Boston Trust Equity |
| Boston Partners All |
Boston Trust and Boston Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Trust and Boston Partners
The main advantage of trading using opposite Boston Trust and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Trust position performs unexpectedly, Boston Partners 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 Boston Partners will offset losses from the drop in Boston Partners' long position.| Boston Trust vs. Boston Trust Asset | Boston Trust vs. Boston Trust Small | Boston Trust vs. Walden Asset Management | Boston Trust vs. Diamond Hill Select |
| Boston Partners vs. Boston Partners All Cap | Boston Partners vs. Parnassus Equity Incme | Boston Partners vs. Boston Partners Small | Boston Partners vs. Diamond Hill Large |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |