Correlation Between Boston Partners and Moderate Strategy

Can any of the company-specific risk be diversified away by investing in both Boston Partners and Moderate 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 Partners and Moderate Strategy 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 Moderate Strategy Fund, you can compare the effects of market volatilities on Boston Partners and Moderate 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 Partners with a short position of Moderate Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Moderate Strategy.

Diversification Opportunities for Boston Partners and Moderate Strategy

0.7

Correlation Coefficient

Boston Partners  Moderate Strategy

Poor diversification

The 3 months correlation between Boston and Moderate is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Moderate Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Strategy 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 Moderate Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Strategy has no effect on the direction of Boston Partners i.e., Boston Partners and Moderate Strategy go up and down completely randomly.

Pair Corralation between Boston Partners and Moderate Strategy

Assuming the 90 days horizon Boston Partners Small is expected to generate 3.15 times more return on investment than Moderate Strategy. However, Boston Partners is 3.15 times more volatile than Moderate Strategy Fund. It trades about 0.12 of its potential returns per unit of risk. Moderate Strategy Fund is currently generating about 0.21 per unit of risk. If you would invest  2,402  in Boston Partners Small on May 16, 2025 and sell it today you would earn a total of  185.00  from holding Boston Partners Small or generate 7.7% return on investment over 90 days.

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

Boston Partners Small  vs.  Moderate Strategy Fund

Boston Partners Small

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Partners Small are ranked lower than 9 (%) 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.

Moderate Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moderate Strategy Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Moderate 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 Partners and Moderate Strategy

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

The idea behind Boston Partners Small and Moderate 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.