Correlation Between Analog Devices and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Analog Devices 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 Analog Devices and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and Boston Properties, you can compare the effects of market volatilities on Analog Devices 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 Analog Devices with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Boston Properties.
Diversification Opportunities for Analog Devices and Boston Properties
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Analog and Boston is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Analog Devices 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 Analog Devices 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 Analog Devices i.e., Analog Devices and Boston Properties go up and down completely randomly.
Pair Corralation between Analog Devices and Boston Properties
Considering the 90-day investment horizon Analog Devices is expected to under-perform the Boston Properties. In addition to that, Analog Devices is 1.27 times more volatile than Boston Properties. It trades about -0.01 of its total potential returns per unit of risk. Boston Properties is currently generating about 0.17 per unit of volatility. If you would invest 5,805 in Boston Properties on September 3, 2024 and sell it today you would earn a total of 2,283 from holding Boston Properties or generate 39.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. Boston Properties
Performance |
| Timeline |
| Analog Devices |
| Boston Properties |
Analog Devices and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and Boston Properties
The main advantage of trading using opposite Analog Devices and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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.| Analog Devices vs. Silicon Motion Technology | Analog Devices vs. ASE Industrial Holding | Analog Devices vs. SemiLEDS | Analog Devices vs. Advanced Micro Devices |
| Boston Properties vs. Office Properties Income | Boston Properties vs. SL Green Realty | Boston Properties vs. Highwoods Properties | Boston Properties vs. Equity Commonwealth |
Check out your portfolio center.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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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