Correlation Between Boston Properties and Clipper Realty
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Clipper Realty 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 Clipper Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Clipper Realty, you can compare the effects of market volatilities on Boston Properties and Clipper Realty 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 Clipper Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Clipper Realty.
Diversification Opportunities for Boston Properties and Clipper Realty
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Clipper is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Clipper Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Realty 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 Clipper Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Realty has no effect on the direction of Boston Properties i.e., Boston Properties and Clipper Realty go up and down completely randomly.
Pair Corralation between Boston Properties and Clipper Realty
Considering the 90-day investment horizon Boston Properties is expected to generate 0.7 times more return on investment than Clipper Realty. However, Boston Properties is 1.43 times less risky than Clipper Realty. It trades about 0.02 of its potential returns per unit of risk. Clipper Realty is currently generating about -0.01 per unit of risk. If you would invest 6,388 in Boston Properties on November 5, 2024 and sell it today you would earn a total of 926.00 from holding Boston Properties or generate 14.5% 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. Clipper Realty
Performance |
| Timeline |
| Boston Properties |
| Clipper Realty |
Boston Properties and Clipper Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Clipper Realty
The main advantage of trading using opposite Boston Properties and Clipper Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Clipper Realty 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 Clipper Realty will offset losses from the drop in Clipper Realty'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 |
| Clipper Realty vs. Nexpoint Residential Trust | Clipper Realty vs. Centerspace | Clipper Realty vs. UDR Inc | Clipper Realty vs. BRT 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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