Correlation Between Boston Properties and Artis REIT
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Artis REIT 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 Artis REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Artis REIT, you can compare the effects of market volatilities on Boston Properties and Artis REIT 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 Artis REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Artis REIT.
Diversification Opportunities for Boston Properties and Artis REIT
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boston and Artis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Artis REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artis REIT 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 Artis REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artis REIT has no effect on the direction of Boston Properties i.e., Boston Properties and Artis REIT go up and down completely randomly.
Pair Corralation between Boston Properties and Artis REIT
Considering the 90-day investment horizon Boston Properties is expected to generate 1.73 times more return on investment than Artis REIT. However, Boston Properties is 1.73 times more volatile than Artis REIT. It trades about -0.1 of its potential returns per unit of risk. Artis REIT is currently generating about -0.19 per unit of risk. If you would invest 8,619 in Boston Properties on August 30, 2024 and sell it today you would lose (333.00) from holding Boston Properties or give up 3.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Artis REIT
Performance |
| Timeline |
| Boston Properties |
| Artis REIT |
Boston Properties and Artis REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Artis REIT
The main advantage of trading using opposite Boston Properties and Artis REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Artis REIT 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 Artis REIT will offset losses from the drop in Artis REIT's long position.| Boston Properties vs. SL Green Realty | Boston Properties vs. Douglas Emmett | Boston Properties vs. Kilroy Realty Corp | Boston Properties vs. Alexandria Real Estate |
| Artis REIT vs. Boston Properties | Artis REIT vs. Kilroy Realty Corp | Artis REIT vs. SL Green Realty | Artis REIT vs. Vornado Realty Trust |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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