Correlation Between Walden Equity and Boston Trust
Can any of the company-specific risk be diversified away by investing in both Walden Equity 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 Walden Equity and Boston Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walden Equity Fund and Boston Trust Small, you can compare the effects of market volatilities on Walden Equity 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 Walden Equity with a short position of Boston Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walden Equity and Boston Trust.
Diversification Opportunities for Walden Equity and Boston Trust
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Walden and Boston is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Walden Equity Fund and Boston Trust Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Trust Small and Walden Equity 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 Walden Equity Fund 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 Small has no effect on the direction of Walden Equity i.e., Walden Equity and Boston Trust go up and down completely randomly.
Pair Corralation between Walden Equity and Boston Trust
Assuming the 90 days horizon Walden Equity is expected to generate 1.37 times less return on investment than Boston Trust. But when comparing it to its historical volatility, Walden Equity Fund is 1.27 times less risky than Boston Trust. It trades about 0.01 of its potential returns per unit of risk. Boston Trust Small is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,565 in Boston Trust Small on January 17, 2025 and sell it today you would earn a total of 45.00 from holding Boston Trust Small or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walden Equity Fund vs. Boston Trust Small
Performance |
| Timeline |
| Walden Equity |
| Boston Trust Small |
Walden Equity and Boston Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walden Equity and Boston Trust
The main advantage of trading using opposite Walden Equity and Boston Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walden Equity 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.| Walden Equity vs. Walden Asset Management | Walden Equity vs. Calvert Large Cap | Walden Equity vs. Calvert Equity Portfolio | Walden Equity vs. Appleseed Fund Appleseed |
| Boston Trust vs. International Fund International | Boston Trust vs. Boston Trust Asset | Boston Trust vs. Queens Road Small | Boston Trust vs. Boston Trust Midcap |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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