Correlation Between Boston Properties and Global Net

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

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

Diversification Opportunities for Boston Properties and Global Net

0.49

Correlation Coefficient

Boston Properties  Global Net

Very weak diversification

The 3 months correlation between Boston and Global is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Boston Properties 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 Properties are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Boston Properties i.e., Boston Properties and Global Net go up and down completely randomly.

Pair Corralation between Boston Properties and Global Net

Considering the 90-day investment horizon Boston Properties is expected to under-perform the Global Net. In addition to that, Boston Properties is 1.11 times more volatile than Global Net Lease. It trades about -0.33 of its total potential returns per unit of risk. Global Net Lease is currently generating about 0.04 per unit of volatility. If you would invest  2,278  in Global Net Lease on October 9, 2024 and sell it today you would earn a total of  28.00  from holding Global Net Lease or generate 1.23% return on investment over 90 days.

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

Boston Properties  vs.  Global Net Lease

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 fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Global Net Lease

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Net Lease are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Global Net is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Boston Properties and Global Net

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

The idea behind Boston Properties and Global Net Lease 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.