Correlation Between Aedifica and Boston Properties

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Can any of the company-specific risk be diversified away by investing in both Aedifica 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 Aedifica and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedifica SA and Boston Properties, you can compare the effects of market volatilities on Aedifica 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 Aedifica with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedifica and Boston Properties.

Diversification Opportunities for Aedifica and Boston Properties

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Aedifica and Boston is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aedifica SA and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Aedifica 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 Aedifica SA 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 Aedifica i.e., Aedifica and Boston Properties go up and down completely randomly.

Pair Corralation between Aedifica and Boston Properties

Assuming the 90 days horizon Aedifica SA is expected to generate 0.62 times more return on investment than Boston Properties. However, Aedifica SA is 1.61 times less risky than Boston Properties. It trades about 0.25 of its potential returns per unit of risk. Boston Properties is currently generating about -0.1 per unit of risk. If you would invest  6,575  in Aedifica SA on November 20, 2025 and sell it today you would earn a total of  1,095  from holding Aedifica SA or generate 16.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Aedifica SA  vs.  Boston Properties

 Performance 
       Timeline  
Aedifica SA 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Aedifica SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Aedifica reported solid returns over the last few months and may actually be approaching a breakup point.
Boston Properties 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Boston Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak 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.

Aedifica and Boston Properties Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aedifica and Boston Properties

The main advantage of trading using opposite Aedifica and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedifica 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 Aedifica SA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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