Correlation Between Boston Trust and Walden Equity
Can any of the company-specific risk be diversified away by investing in both Boston Trust and Walden 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 Walden Equity 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 Walden Equity Fund, you can compare the effects of market volatilities on Boston Trust and Walden 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 Walden Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and Walden Equity.
Diversification Opportunities for Boston Trust and Walden Equity
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Walden is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Midcap and Walden Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Equity 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 Walden Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Equity has no effect on the direction of Boston Trust i.e., Boston Trust and Walden Equity go up and down completely randomly.
Pair Corralation between Boston Trust and Walden Equity
Assuming the 90 days horizon Boston Trust Midcap is expected to under-perform the Walden Equity. In addition to that, Boston Trust is 1.01 times more volatile than Walden Equity Fund. It trades about -0.03 of its total potential returns per unit of risk. Walden Equity Fund is currently generating about -0.01 per unit of volatility. If you would invest 3,734 in Walden Equity Fund on October 26, 2024 and sell it today you would lose (36.00) from holding Walden Equity Fund or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Trust Midcap vs. Walden Equity Fund
Performance |
| Timeline |
| Boston Trust Midcap |
| Walden Equity |
Boston Trust and Walden Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Trust and Walden Equity
The main advantage of trading using opposite Boston Trust and Walden Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Trust position performs unexpectedly, Walden 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 Walden Equity will offset losses from the drop in Walden Equity'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 |
| Walden Equity vs. Walden Asset Management | Walden Equity vs. Calvert Large Cap | Walden Equity vs. Calvert Equity Portfolio | Walden Equity vs. Appleseed Fund Appleseed |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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