Correlation Between Alpine Global and Boston Trust

Can any of the company-specific risk be diversified away by investing in both Alpine Global 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 Alpine Global and Boston Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alpine Global Infrastructure and Boston Trust Asset, you can compare the effects of market volatilities on Alpine Global 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 Alpine Global with a short position of Boston Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpine Global and Boston Trust.

Diversification Opportunities for Alpine Global and Boston Trust

0.62

Correlation Coefficient

Alpine Global  Boston Trust

Poor diversification

The 3 months correlation between Alpine and Boston is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alpine Global Infrastructure 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 Alpine Global 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 Alpine Global Infrastructure 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 Alpine Global i.e., Alpine Global and Boston Trust go up and down completely randomly.

Pair Corralation between Alpine Global and Boston Trust

Assuming the 90 days horizon Alpine Global is expected to generate 2.45 times less return on investment than Boston Trust. In addition to that, Alpine Global is 1.33 times more volatile than Boston Trust Asset. It trades about 0.02 of its total potential returns per unit of risk. Boston Trust Asset is currently generating about 0.06 per unit of volatility. If you would invest  5,238  in Boston Trust Asset on September 28, 2024 and sell it today you would earn a total of  1,025  from holding Boston Trust Asset or generate 19.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Alpine Global Infrastructure  vs.  Boston Trust Asset

Alpine Global Infras

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpine Global Infrastructure has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Boston Trust Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Trust Asset has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Boston Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alpine Global and Boston Trust

The main advantage of trading using opposite Alpine Global and Boston Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpine Global 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.

The idea behind Alpine Global Infrastructure and Boston Trust Asset pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.