Correlation Between Boston Trust and Virtus Kar

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

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

Diversification Opportunities for Boston Trust and Virtus Kar

0.96

Correlation Coefficient

Boston Trust  Virtus Kar

Almost no diversification

The 3 months correlation between Boston and Virtus is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Midcap and Virtus Kar Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Kar Mid and Boston Trust 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 Trust Midcap are associated (or correlated) with Virtus Kar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Kar Mid has no effect on the direction of Boston Trust i.e., Boston Trust and Virtus Kar go up and down completely randomly.

Pair Corralation between Boston Trust and Virtus Kar

Assuming the 90 days horizon Boston Trust Midcap is expected to generate 0.87 times more return on investment than Virtus Kar. However, Boston Trust Midcap is 1.15 times less risky than Virtus Kar. It trades about 0.19 of its potential returns per unit of risk. Virtus Kar Mid Cap is currently generating about 0.16 per unit of risk. If you would invest  2,486  in Boston Trust Midcap on September 3, 2024 and sell it today you would earn a total of  212.00  from holding Boston Trust Midcap or generate 8.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Boston Trust Midcap  vs.  Virtus Kar Mid Cap

Boston Trust Midcap

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Trust Midcap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Boston Trust may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Virtus Kar Mid

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Kar Mid Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Virtus Kar may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Boston Trust and Virtus Kar

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

The idea behind Boston Trust Midcap and Virtus Kar Mid Cap 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.