Correlation Between Abacus Life, and Boston Properties

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

By analyzing existing cross correlation between Abacus Life, 9875 and Boston Properties, you can compare the effects of market volatilities on Abacus Life, and Boston Properties 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 Abacus Life, with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abacus Life, and Boston Properties.

Diversification Opportunities for Abacus Life, and Boston Properties

-0.25

Correlation Coefficient

Abacus Life,  Boston Properties

Very good diversification

The 3 months correlation between Abacus and Boston is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Life, 9875 and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Abacus Life, 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 Abacus Life, 9875 are associated (or correlated) with Boston Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Properties has no effect on the direction of Abacus Life, i.e., Abacus Life, and Boston Properties go up and down completely randomly.

Pair Corralation between Abacus Life, and Boston Properties

Assuming the 90 days horizon Abacus Life, 9875 is expected to generate 0.32 times more return on investment than Boston Properties. However, Abacus Life, 9875 is 3.13 times less risky than Boston Properties. It trades about 0.13 of its potential returns per unit of risk. Boston Properties is currently generating about -0.13 per unit of risk. If you would invest  2,650  in Abacus Life, 9875 on September 21, 2024 and sell it today you would earn a total of  49.00  from holding Abacus Life, 9875 or generate 1.85% return on investment over 90 days.

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

Abacus Life, 9875  vs.  Boston Properties

Abacus Life, 9875

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Abacus Life, 9875 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Abacus Life, is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Boston Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Abacus Life, and Boston Properties

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

The idea behind Abacus Life, 9875 and Boston Properties 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.