Correlation Between Integrity Growth and Boston Trust

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

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

Diversification Opportunities for Integrity Growth and Boston Trust

0.94

Correlation Coefficient

Integrity Growth  Boston Trust

Almost no diversification

The 3 months correlation between INTEGRITY and Boston is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Integrity Growth Income and Boston Trust Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Trust Asset and Integrity Growth 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 Integrity Growth Income are associated (or correlated) with Boston Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Trust Asset has no effect on the direction of Integrity Growth i.e., Integrity Growth and Boston Trust go up and down completely randomly.

Pair Corralation between Integrity Growth and Boston Trust

Assuming the 90 days horizon Integrity Growth Income is expected to generate 1.56 times more return on investment than Boston Trust. However, Integrity Growth is 1.56 times more volatile than Boston Trust Asset. It trades about 0.17 of its potential returns per unit of risk. Boston Trust Asset is currently generating about 0.18 per unit of risk. If you would invest  9,824  in Integrity Growth Income on September 4, 2024 and sell it today you would earn a total of  791.00  from holding Integrity Growth Income or generate 8.05% return on investment over 90 days.

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

Integrity Growth Income  vs.  Boston Trust Asset

Integrity Growth Income

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Integrity Growth Income are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Integrity Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Integrity Growth and Boston Trust

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

The idea behind Integrity Growth Income and Boston Trust Asset 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.