Correlation Between Columbia Select and Boston Trust
Can any of the company-specific risk be diversified away by investing in both Columbia Select 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 Columbia Select and Boston Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Select Large Cap and Boston Trust Midcap, you can compare the effects of market volatilities on Columbia Select 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 Columbia Select with a short position of Boston Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Select and Boston Trust.
Diversification Opportunities for Columbia Select and Boston Trust
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Columbia and Boston is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Select Large 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 Columbia Select 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 Columbia Select Large 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 Columbia Select i.e., Columbia Select and Boston Trust go up and down completely randomly.
Pair Corralation between Columbia Select and Boston Trust
Assuming the 90 days horizon Columbia Select is expected to generate 1.56 times less return on investment than Boston Trust. But when comparing it to its historical volatility, Columbia Select Large Cap is 1.11 times less risky than Boston Trust. It trades about 0.21 of its potential returns per unit of risk. Boston Trust Midcap is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,556 in Boston Trust Midcap on August 29, 2024 and sell it today you would earn a total of 137.00 from holding Boston Trust Midcap or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Select Large Cap vs. Boston Trust Midcap
Performance |
| Timeline |
| Columbia Select Large |
| Boston Trust Midcap |
Columbia Select and Boston Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Select and Boston Trust
The main advantage of trading using opposite Columbia Select and Boston Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Select 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.| Columbia Select vs. Columbia Select Large Cap | Columbia Select vs. Columbia Select Large Cap | Columbia Select vs. Columbia Select Large Cap | Columbia Select vs. Federated Mdt Large |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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