Correlation Between Boston Partners and Gold Portfolio

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

By analyzing existing cross correlation between Boston Partners Small and Gold Portfolio Fidelity, you can compare the effects of market volatilities on Boston Partners and Gold Portfolio 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 Gold Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Gold Portfolio.

Diversification Opportunities for Boston Partners and Gold Portfolio

-0.33

Correlation Coefficient

Boston Partners  Gold Portfolio

Very good diversification

The 3 months correlation between Boston and Gold is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Gold Portfolio Fidelity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Portfolio Fidelity 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 Small are associated (or correlated) with Gold Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Portfolio Fidelity has no effect on the direction of Boston Partners i.e., Boston Partners and Gold Portfolio go up and down completely randomly.

Pair Corralation between Boston Partners and Gold Portfolio

Assuming the 90 days horizon Boston Partners Small is expected to under-perform the Gold Portfolio. But the mutual fund apears to be less risky and, when comparing its historical volatility, Boston Partners Small is 1.51 times less risky than Gold Portfolio. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Gold Portfolio Fidelity is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  2,486  in Gold Portfolio Fidelity on December 26, 2024 and sell it today you would earn a total of  777.00  from holding Gold Portfolio Fidelity or generate 31.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Boston Partners Small  vs.  Gold Portfolio Fidelity

Boston Partners Small

Risk-Adjusted Performance

Very Weak

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

Gold Portfolio Fidelity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Portfolio Fidelity are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gold Portfolio showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boston Partners and Gold Portfolio

The main advantage of trading using opposite Boston Partners and Gold Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Gold Portfolio 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 Gold Portfolio will offset losses from the drop in Gold Portfolio's long position.

The idea behind Boston Partners Small and Gold Portfolio Fidelity 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..