Correlation Between Champlain Mid and Boston Trust
Can any of the company-specific risk be diversified away by investing in both Champlain Mid and Boston Trust 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 Champlain Mid and Boston Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Mid Cap and Boston Trust Midcap, you can compare the effects of market volatilities on Champlain Mid and Boston Trust 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 Champlain Mid with a short position of Boston Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Mid and Boston Trust.
Diversification Opportunities for Champlain Mid and Boston Trust
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Champlain and Boston is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Mid Cap and Boston Trust Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Trust Midcap and Champlain Mid 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 Champlain Mid Cap are associated (or correlated) with Boston Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Trust Midcap has no effect on the direction of Champlain Mid i.e., Champlain Mid and Boston Trust go up and down completely randomly.
Pair Corralation between Champlain Mid and Boston Trust
Assuming the 90 days horizon Champlain Mid Cap is expected to generate 1.16 times more return on investment than Boston Trust. However, Champlain Mid is 1.16 times more volatile than Boston Trust Midcap. It trades about 0.38 of its potential returns per unit of risk. Boston Trust Midcap is currently generating about 0.31 per unit of risk. If you would invest 2,424 in Champlain Mid Cap on August 28, 2024 and sell it today you would earn a total of 196.00 from holding Champlain Mid Cap or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Mid Cap vs. Boston Trust Midcap
Performance |
| Timeline |
| Champlain Mid Cap |
| Boston Trust Midcap |
Champlain Mid and Boston Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Mid and Boston Trust
The main advantage of trading using opposite Champlain Mid and Boston Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Mid position performs unexpectedly, Boston Trust 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 Trust will offset losses from the drop in Boston Trust's long position.| Champlain Mid vs. Champlain Small Pany | Champlain Mid vs. T Rowe Price | Champlain Mid vs. American Mutual Fund | Champlain Mid vs. Loomis Sayles Growth |
| 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 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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