Correlation Between Balanced Fund and Boston Partners
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and Boston Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Boston Partners Emerging, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Boston Partners.
Diversification Opportunities for Balanced Fund and Boston Partners
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Balanced and Boston is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Boston Partners Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Emerging and Balanced Fund 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 Balanced Fund Investor 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 Emerging has no effect on the direction of Balanced Fund i.e., Balanced Fund and Boston Partners go up and down completely randomly.
Pair Corralation between Balanced Fund and Boston Partners
Assuming the 90 days horizon Balanced Fund Investor is expected to generate 0.69 times more return on investment than Boston Partners. However, Balanced Fund Investor is 1.45 times less risky than Boston Partners. It trades about 0.1 of its potential returns per unit of risk. Boston Partners Emerging is currently generating about 0.05 per unit of risk. If you would invest 1,578 in Balanced Fund Investor on September 4, 2024 and sell it today you would earn a total of 450.00 from holding Balanced Fund Investor or generate 28.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.44% |
| Values | Daily Returns |
Balanced Fund Investor vs. Boston Partners Emerging
Performance |
| Timeline |
| Balanced Fund Investor |
| Boston Partners Emerging |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Balanced Fund and Boston Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Boston Partners
The main advantage of trading using opposite Balanced Fund and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.| Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
| Boston Partners vs. Goldman Sachs Short | Boston Partners vs. James Balanced Golden | Boston Partners vs. International Investors Gold | Boston Partners vs. Goldman Sachs Clean |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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