Correlation Between Boston Properties and Ventas

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

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

Diversification Opportunities for Boston Properties and Ventas

0.25

Correlation Coefficient

Boston Properties  Ventas

Modest diversification

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

Pair Corralation between Boston Properties and Ventas

Considering the 90-day investment horizon Boston Properties is expected to under-perform the Ventas. In addition to that, Boston Properties is 1.18 times more volatile than Ventas Inc. It trades about -0.11 of its total potential returns per unit of risk. Ventas Inc is currently generating about 0.08 per unit of volatility. If you would invest  6,358  in Ventas Inc on November 28, 2024 and sell it today you would earn a total of  470.00  from holding Ventas Inc or generate 7.39% return on investment over 90 days.

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

Boston Properties  vs.  Ventas Inc

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

Ventas Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ventas Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Ventas may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Boston Properties and Ventas

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

The idea behind Boston Properties and Ventas Inc 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 Valuation module to check real value of public entities based on technical and fundamental data.