Correlation Between Boston Properties and Interactive Strength

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

By analyzing existing cross correlation between Boston Properties and Interactive Strength Common, you can compare the effects of market volatilities on Boston Properties and Interactive Strength 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 Interactive Strength. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Interactive Strength.

Diversification Opportunities for Boston Properties and Interactive Strength

0.3

Correlation Coefficient

Boston Properties  Interactive Strength

Weak diversification

The 3 months correlation between Boston and Interactive is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Interactive Strength Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Strength 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 Interactive Strength. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Strength has no effect on the direction of Boston Properties i.e., Boston Properties and Interactive Strength go up and down completely randomly.

Pair Corralation between Boston Properties and Interactive Strength

Considering the 90-day investment horizon Boston Properties is expected to generate 0.16 times more return on investment than Interactive Strength. However, Boston Properties is 6.08 times less risky than Interactive Strength. It trades about -0.05 of its potential returns per unit of risk. Interactive Strength Common is currently generating about -0.06 per unit of risk. If you would invest  7,319  in Boston Properties on December 30, 2024 and sell it today you would lose (551.00) from holding Boston Properties or give up 7.53% of portfolio value over 90 days.

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

Boston Properties  vs.  Interactive Strength Common

Boston Properties

Risk-Adjusted Performance

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.

Interactive Strength

Risk-Adjusted Performance

Very Weak

Over the last 90 days Interactive Strength Common 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 April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Boston Properties and Interactive Strength

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

The idea behind Boston Properties and Interactive Strength Common 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.