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 Asset, 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 Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Trust Asset 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 Asset 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 Fund is expected to generate 1.2 times more return on investment than Boston Trust. However, Walden Equity is 1.2 times more volatile than Boston Trust Asset. It trades about 0.02 of its potential returns per unit of risk. Boston Trust Asset is currently generating about 0.02 per unit of risk. If you would invest 3,578 in Walden Equity Fund on October 22, 2024 and sell it today you would earn a total of 60.00 from holding Walden Equity Fund or generate 1.68% 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 Asset
Performance |
| Timeline |
| Walden Equity |
| Boston Trust Asset |
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. 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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