Correlation Between Boston Trust and Vivaldi Multi-strategy

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

By analyzing existing cross correlation between Boston Trust Asset and Vivaldi Multi Strategy Fund, you can compare the effects of market volatilities on Boston Trust and Vivaldi Multi-strategy 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 Vivaldi Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Trust and Vivaldi Multi-strategy.

Diversification Opportunities for Boston Trust and Vivaldi Multi-strategy

0.73

Correlation Coefficient

Boston Trust  Vivaldi Multi-strategy

Poor diversification

The 3 months correlation between Boston and Vivaldi is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Boston Trust Asset and Vivaldi Multi Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivaldi Multi Strategy 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 Asset are associated (or correlated) with Vivaldi Multi-strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivaldi Multi Strategy has no effect on the direction of Boston Trust i.e., Boston Trust and Vivaldi Multi-strategy go up and down completely randomly.

Pair Corralation between Boston Trust and Vivaldi Multi-strategy

If you would invest  6,381  in Boston Trust Asset on September 4, 2024 and sell it today you would earn a total of  355.00  from holding Boston Trust Asset or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Boston Trust Asset  vs.  Vivaldi Multi Strategy Fund

Boston Trust Asset

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Trust Asset are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Boston Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vivaldi Multi Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Boston Trust and Vivaldi Multi-strategy

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

The idea behind Boston Trust Asset and Vivaldi Multi Strategy Fund 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.