Correlation Between Boston Trust and Baron Asset
Can any of the company-specific risk be diversified away by investing in both Boston Trust and Baron 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 Baron Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Trust Midcap and Baron Asset Fund, you can compare the effects of market volatilities on Boston Trust and Baron 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 Baron Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and Baron Asset.
Diversification Opportunities for Boston Trust and Baron Asset
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Baron is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Midcap and Baron Asset Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Asset 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 Midcap are associated (or correlated) with Baron Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Asset Fund has no effect on the direction of Boston Trust i.e., Boston Trust and Baron Asset go up and down completely randomly.
Pair Corralation between Boston Trust and Baron Asset
Assuming the 90 days horizon Boston Trust is expected to generate 1.11 times less return on investment than Baron Asset. But when comparing it to its historical volatility, Boston Trust Midcap is 1.14 times less risky than Baron Asset. It trades about 0.17 of its potential returns per unit of risk. Baron Asset Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 9,935 in Baron Asset Fund on October 23, 2024 and sell it today you would earn a total of 242.00 from holding Baron Asset Fund or generate 2.44% 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 Midcap vs. Baron Asset Fund
Performance |
| Timeline |
| Boston Trust Midcap |
| Baron Asset Fund |
Boston Trust and Baron Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Trust and Baron Asset
The main advantage of trading using opposite Boston Trust and Baron Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Trust position performs unexpectedly, Baron 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 Baron Asset will offset losses from the drop in Baron Asset's long position.| Boston Trust vs. Boston Trust Asset | Boston Trust vs. Virtus Kar Mid Cap | Boston Trust vs. Virtus Kar Mid Cap | Boston Trust vs. Boston Trust Small |
| Baron Asset vs. Baron Asset Fund | Baron Asset vs. Blackrock Mid Cap | Baron Asset vs. Blackrock Mid Cap | Baron 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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