Correlation Between Boston Partners and Catalyst Enhanced

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

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

Diversification Opportunities for Boston Partners and Catalyst Enhanced

-0.17

Correlation Coefficient

Boston Partners  Catalyst Enhanced

Good diversification

The 3 months correlation between Boston and Catalyst is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Catalyst Enhanced Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Enhanced Income and Boston Partners 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 Partners Small are associated (or correlated) with Catalyst Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Enhanced Income has no effect on the direction of Boston Partners i.e., Boston Partners and Catalyst Enhanced go up and down completely randomly.

Pair Corralation between Boston Partners and Catalyst Enhanced

Assuming the 90 days horizon Boston Partners Small is expected to generate 2.26 times more return on investment than Catalyst Enhanced. However, Boston Partners is 2.26 times more volatile than Catalyst Enhanced Income. It trades about 0.16 of its potential returns per unit of risk. Catalyst Enhanced Income is currently generating about -0.04 per unit of risk. If you would invest  2,326  in Boston Partners Small on May 22, 2025 and sell it today you would earn a total of  221.00  from holding Boston Partners Small or generate 9.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Boston Partners Small  vs.  Catalyst Enhanced Income

Boston Partners Small

Risk-Adjusted Performance

Good

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

Catalyst Enhanced Income

Risk-Adjusted Performance

Weakest

Over the last 90 days Catalyst Enhanced Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Catalyst Enhanced 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 Partners and Catalyst Enhanced

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

The idea behind Boston Partners Small and Catalyst Enhanced Income 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.