Correlation Between NYSE Composite and Boston Partners
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Boston Partners 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 NYSE Composite and Boston Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Boston Partners Small, you can compare the effects of market volatilities on NYSE Composite and Boston Partners 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 NYSE Composite with a short position of Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Boston Partners.
Diversification Opportunities for NYSE Composite and Boston Partners
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Boston is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Boston Partners Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Small and NYSE Composite 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 NYSE Composite are associated (or correlated) with Boston Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Partners Small has no effect on the direction of NYSE Composite i.e., NYSE Composite and Boston Partners go up and down completely randomly.
Pair Corralation between NYSE Composite and Boston Partners
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.05 times less return on investment than Boston Partners. But when comparing it to its historical volatility, NYSE Composite is 1.77 times less risky than Boston Partners. It trades about 0.11 of its potential returns per unit of risk. Boston Partners Small is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,362 in Boston Partners Small on August 26, 2024 and sell it today you would earn a total of 763.00 from holding Boston Partners Small or generate 32.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Boston Partners Small
Performance |
| Timeline |
NYSE Composite and Boston Partners Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Boston Partners Small
Pair trading matchups for Boston Partners
Pair Trading with NYSE Composite and Boston Partners
The main advantage of trading using opposite NYSE Composite and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Boston Partners 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 Partners will offset losses from the drop in Boston Partners' long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Boston Partners vs. Boston Partners Emerging | Boston Partners vs. Boston Partners Global | Boston Partners vs. Boston Partners Global | Boston Partners vs. Rbb Fund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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