Correlation Between Boston Partners and Health Biotchnology
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Health Biotchnology 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 Boston Partners and Health Biotchnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Longshort and Health Biotchnology Portfolio, you can compare the effects of market volatilities on Boston Partners and Health Biotchnology 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 Boston Partners with a short position of Health Biotchnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Health Biotchnology.
Diversification Opportunities for Boston Partners and Health Biotchnology
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and Health is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Longshort and Health Biotchnology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Biotchnology and Boston Partners 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 Boston Partners Longshort are associated (or correlated) with Health Biotchnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Biotchnology has no effect on the direction of Boston Partners i.e., Boston Partners and Health Biotchnology go up and down completely randomly.
Pair Corralation between Boston Partners and Health Biotchnology
Assuming the 90 days horizon Boston Partners Longshort is expected to generate 0.53 times more return on investment than Health Biotchnology. However, Boston Partners Longshort is 1.89 times less risky than Health Biotchnology. It trades about 0.08 of its potential returns per unit of risk. Health Biotchnology Portfolio is currently generating about -0.19 per unit of risk. If you would invest 1,501 in Boston Partners Longshort on September 14, 2024 and sell it today you would earn a total of 33.00 from holding Boston Partners Longshort or generate 2.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Boston Partners Longshort vs. Health Biotchnology Portfolio
Performance |
Timeline |
Boston Partners Longshort |
Health Biotchnology |
Boston Partners and Health Biotchnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boston Partners and Health Biotchnology
The main advantage of trading using opposite Boston Partners and Health Biotchnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Health Biotchnology 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 Health Biotchnology will offset losses from the drop in Health Biotchnology's long position.Boston Partners vs. Boston Partners Longshort | Boston Partners vs. Blackrock Midcap Index | Boston Partners vs. The Arbitrage Fund | Boston Partners vs. Calamos Market Neutral |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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