Correlation Between Boston Properties and Bassett Furniture
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Bassett Furniture 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 Bassett Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Bassett Furniture Industries, you can compare the effects of market volatilities on Boston Properties and Bassett Furniture 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 Bassett Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Bassett Furniture.
Diversification Opportunities for Boston Properties and Bassett Furniture
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Boston and Bassett is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Bassett Furniture Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassett Furniture 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 Bassett Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassett Furniture has no effect on the direction of Boston Properties i.e., Boston Properties and Bassett Furniture go up and down completely randomly.
Pair Corralation between Boston Properties and Bassett Furniture
Considering the 90-day investment horizon Boston Properties is expected to generate 24.28 times less return on investment than Bassett Furniture. But when comparing it to its historical volatility, Boston Properties is 1.2 times less risky than Bassett Furniture. It trades about 0.01 of its potential returns per unit of risk. Bassett Furniture Industries is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,389 in Bassett Furniture Industries on August 31, 2024 and sell it today you would earn a total of 119.00 from holding Bassett Furniture Industries or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Bassett Furniture Industries
Performance |
| Timeline |
| Boston Properties |
| Bassett Furniture |
Boston Properties and Bassett Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Bassett Furniture
The main advantage of trading using opposite Boston Properties and Bassett Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Bassett Furniture 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 Bassett Furniture will offset losses from the drop in Bassett Furniture'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 |
| Bassett Furniture vs. Hooker Furniture | Bassett Furniture vs. Flexsteel Industries | Bassett Furniture vs. Haverty Furniture Companies | Bassett Furniture vs. La Z Boy Incorporated |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |