Correlation Between Smithson Investment and Boston International

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

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

Diversification Opportunities for Smithson Investment and Boston International

0.0

Correlation Coefficient

Smithson Investment  Boston International

Pay attention - limited upside

The 3 months correlation between Smithson and Boston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Smithson Investment Trust and Boston International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston International and Smithson Investment 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 Smithson Investment Trust are associated (or correlated) with Boston International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston International has no effect on the direction of Smithson Investment i.e., Smithson Investment and Boston International go up and down completely randomly.

Pair Corralation between Smithson Investment and Boston International

If you would invest  0.00  in Boston International Holdings on December 23, 2024 and sell it today you would earn a total of  0.00  from holding Boston International Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Smithson Investment Trust  vs.  Boston International Holdings

Smithson Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smithson Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Smithson Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Boston International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boston International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Boston International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Smithson Investment and Boston International

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

The idea behind Smithson Investment Trust and Boston International Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.