Correlation Between Boston Properties and 784730AB9

Can any of the company-specific risk be diversified away by investing in both Boston Properties and 784730AB9 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 784730AB9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boston Properties and US784730AB94, you can compare the effects of market volatilities on Boston Properties and 784730AB9 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 784730AB9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and 784730AB9.

Diversification Opportunities for Boston Properties and 784730AB9

-0.56

Correlation Coefficient

Boston Properties  784730AB9

Excellent diversification

The 3 months correlation between Boston and 784730AB9 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and US784730AB94 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US784730AB94 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 784730AB9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US784730AB94 has no effect on the direction of Boston Properties i.e., Boston Properties and 784730AB9 go up and down completely randomly.

Pair Corralation between Boston Properties and 784730AB9

Considering the 90-day investment horizon Boston Properties is expected to under-perform the 784730AB9. But the stock apears to be less risky and, when comparing its historical volatility, Boston Properties is 5.29 times less risky than 784730AB9. The stock trades about -0.09 of its potential returns per unit of risk. The US784730AB94 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  9,615  in US784730AB94 on October 25, 2024 and sell it today you would earn a total of  137.00  from holding US784730AB94 or generate 1.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	21.05%
Values	Daily Returns

Boston Properties  vs.  US784730AB94

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 unsteady 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.

US784730AB94

Risk-Adjusted Performance

4 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in US784730AB94 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 784730AB9 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boston Properties and 784730AB9

The main advantage of trading using opposite Boston Properties and 784730AB9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, 784730AB9 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 784730AB9 will offset losses from the drop in 784730AB9's long position.

The idea behind Boston Properties and US784730AB94 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.