Correlation Between Mairs Power and Boston Trust
Can any of the company-specific risk be diversified away by investing in both Mairs Power 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 Mairs Power and Boston Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Balanced and Boston Trust Asset, you can compare the effects of market volatilities on Mairs Power 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 Mairs Power with a short position of Boston Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Boston Trust.
Diversification Opportunities for Mairs Power and Boston Trust
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mairs and Boston is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Balanced and Boston Trust Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Trust Asset and Mairs Power 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 Mairs Power Balanced 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 Asset has no effect on the direction of Mairs Power i.e., Mairs Power and Boston Trust go up and down completely randomly.
Pair Corralation between Mairs Power and Boston Trust
Assuming the 90 days horizon Mairs Power Balanced is expected to generate 1.03 times more return on investment than Boston Trust. However, Mairs Power is 1.03 times more volatile than Boston Trust Asset. It trades about 0.21 of its potential returns per unit of risk. Boston Trust Asset is currently generating about 0.21 per unit of risk. If you would invest 11,086 in Mairs Power Balanced on August 30, 2024 and sell it today you would earn a total of 322.00 from holding Mairs Power Balanced or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Balanced vs. Boston Trust Asset
Performance |
| Timeline |
| Mairs Power Balanced |
| Boston Trust Asset |
Mairs Power and Boston Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Boston Trust
The main advantage of trading using opposite Mairs Power and Boston Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power 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.| Mairs Power vs. Mairs Power Growth | Mairs Power vs. Mairs Power Small | Mairs Power vs. Berwyn Income Fund | Mairs Power vs. Fpa Crescent Fund |
| Boston Trust vs. Walden Asset Management | Boston Trust vs. Boston Trust Midcap | Boston Trust vs. Boston Trust Equity | 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |