Correlation Between Boston Properties and Easterly Government
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Easterly Government 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 Easterly Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Easterly Government Properties, you can compare the effects of market volatilities on Boston Properties and Easterly Government 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 Easterly Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Easterly Government.
Diversification Opportunities for Boston Properties and Easterly Government
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Easterly is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Easterly Government Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easterly Government 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 Easterly Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easterly Government has no effect on the direction of Boston Properties i.e., Boston Properties and Easterly Government go up and down completely randomly.
Pair Corralation between Boston Properties and Easterly Government
Assuming the 90 days horizon Boston Properties is expected to generate 1.39 times more return on investment than Easterly Government. However, Boston Properties is 1.39 times more volatile than Easterly Government Properties. It trades about 0.08 of its potential returns per unit of risk. Easterly Government Properties is currently generating about 0.03 per unit of risk. If you would invest 5,589 in Boston Properties on September 3, 2024 and sell it today you would earn a total of 2,147 from holding Boston Properties or generate 38.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Easterly Government Properties
Performance |
| Timeline |
| Boston Properties |
| Easterly Government |
Boston Properties and Easterly Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Easterly Government
The main advantage of trading using opposite Boston Properties and Easterly Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Easterly Government 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 Easterly Government will offset losses from the drop in Easterly Government's long position.| Boston Properties vs. USWE SPORTS AB | Boston Properties vs. Fukuyama Transporting Co | Boston Properties vs. SCIENCE IN SPORT | Boston Properties vs. CarsalesCom |
| Easterly Government vs. Boston Properties | Easterly Government vs. COUSINS PTIES INC | Easterly Government vs. Office Properties Income | Easterly Government vs. CREMECOMTRSBI DL 001 |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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