Correlation Between Boston Properties and Great Portland
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Great Portland 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 Great Portland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Great Portland Estates, you can compare the effects of market volatilities on Boston Properties and Great Portland 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 Great Portland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Great Portland.
Diversification Opportunities for Boston Properties and Great Portland
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and Great is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Great Portland Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Portland Estates 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 Great Portland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Portland Estates has no effect on the direction of Boston Properties i.e., Boston Properties and Great Portland go up and down completely randomly.
Pair Corralation between Boston Properties and Great Portland
Assuming the 90 days horizon Boston Properties is expected to generate 1.01 times more return on investment than Great Portland. However, Boston Properties is 1.01 times more volatile than Great Portland Estates. It trades about 0.18 of its potential returns per unit of risk. Great Portland Estates is currently generating about -0.02 per unit of risk. If you would invest 5,330 in Boston Properties on September 3, 2024 and sell it today you would earn a total of 2,406 from holding Boston Properties or generate 45.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Great Portland Estates
Performance |
| Timeline |
| Boston Properties |
| Great Portland Estates |
Boston Properties and Great Portland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Great Portland
The main advantage of trading using opposite Boston Properties and Great Portland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Great Portland 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 Great Portland will offset losses from the drop in Great Portland'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 |
| Great Portland vs. Boston Properties | Great Portland vs. COUSINS PTIES INC | Great Portland vs. Office Properties Income | Great Portland 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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