Correlation Between Boston Properties and Centerspace
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Centerspace 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 Centerspace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Centerspace, you can compare the effects of market volatilities on Boston Properties and Centerspace 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 Centerspace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Centerspace.
Diversification Opportunities for Boston Properties and Centerspace
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boston and Centerspace is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Centerspace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerspace 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 Centerspace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerspace has no effect on the direction of Boston Properties i.e., Boston Properties and Centerspace go up and down completely randomly.
Pair Corralation between Boston Properties and Centerspace
Considering the 90-day investment horizon Boston Properties is expected to under-perform the Centerspace. But the stock apears to be less risky and, when comparing its historical volatility, Boston Properties is 1.21 times less risky than Centerspace. The stock trades about -0.22 of its potential returns per unit of risk. The Centerspace is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,089 in Centerspace on August 25, 2024 and sell it today you would earn a total of 282.00 from holding Centerspace or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Boston Properties vs. Centerspace
Performance |
| Timeline |
| Boston Properties |
| Centerspace |
Boston Properties and Centerspace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Centerspace
The main advantage of trading using opposite Boston Properties and Centerspace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Centerspace 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 Centerspace will offset losses from the drop in Centerspace'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 |
| Centerspace vs. Essex Property Trust | Centerspace vs. Mid America Apartment Communities | Centerspace vs. Camden Property Trust | Centerspace vs. UDR Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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