Correlation Between MQGAU and Boston Properties

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

By analyzing existing cross correlation between MQGAU 5491 09 NOV 33 and Boston Properties, you can compare the effects of market volatilities on MQGAU 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 MQGAU with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of MQGAU and Boston Properties.

Diversification Opportunities for MQGAU and Boston Properties

-0.18

Correlation Coefficient

MQGAU  Boston Properties

Good diversification

The 3 months correlation between MQGAU and Boston is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding MQGAU 5491 09 NOV 33 and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and MQGAU 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 MQGAU 5491 09 NOV 33 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 MQGAU i.e., MQGAU and Boston Properties go up and down completely randomly.

Pair Corralation between MQGAU and Boston Properties

Assuming the 90 days trading horizon MQGAU 5491 09 NOV 33 is expected to under-perform the Boston Properties. But the bond apears to be less risky and, when comparing its historical volatility, MQGAU 5491 09 NOV 33 is 1.9 times less risky than Boston Properties. The bond trades about -0.42 of its potential returns per unit of risk. The Boston Properties is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  8,104  in Boston Properties on October 26, 2024 and sell it today you would lose (741.50) from holding Boston Properties or give up 9.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	27.5%
Values	Daily Returns

MQGAU 5491 09 NOV 33  vs.  Boston Properties

MQGAU 5491 09

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MQGAU 5491 09 NOV 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for MQGAU 5491 09 NOV 33 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 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.

Pair Trading with MQGAU and Boston Properties

The main advantage of trading using opposite MQGAU and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MQGAU 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 MQGAU 5491 09 NOV 33 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.