Correlation Between Caldwell Orkin and Boston Partners

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

By analyzing existing cross correlation between Caldwell Orkin Market and Boston Partners Longshort, you can compare the effects of market volatilities on Caldwell Orkin and Boston Partners 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 Caldwell Orkin with a short position of Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caldwell Orkin and Boston Partners.

Diversification Opportunities for Caldwell Orkin and Boston Partners

0.29

Correlation Coefficient

Caldwell Orkin  Boston Partners

Modest diversification

The 3 months correlation between Caldwell and Boston is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Caldwell Orkin Market and Boston Partners Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Longshort and Caldwell Orkin 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 Caldwell Orkin Market are associated (or correlated) with Boston Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Partners Longshort has no effect on the direction of Caldwell Orkin i.e., Caldwell Orkin and Boston Partners go up and down completely randomly.

Pair Corralation between Caldwell Orkin and Boston Partners

Assuming the 90 days horizon Caldwell Orkin Market is expected to generate 0.15 times more return on investment than Boston Partners. However, Caldwell Orkin Market is 6.5 times less risky than Boston Partners. It trades about 0.11 of its potential returns per unit of risk. Boston Partners Longshort is currently generating about -0.21 per unit of risk. If you would invest  5,119  in Caldwell Orkin Market on September 15, 2024 and sell it today you would earn a total of  88.00  from holding Caldwell Orkin Market or generate 1.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Caldwell Orkin Market  vs.  Boston Partners Longshort

Caldwell Orkin Market

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Caldwell Orkin Market are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Caldwell Orkin showed solid returns over the last few months and may actually be approaching a breakup point.

Boston Partners Longshort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Partners Longshort has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Caldwell Orkin and Boston Partners

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

The idea behind Caldwell Orkin Market and Boston Partners Longshort 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.