Correlation Between Boston Properties and Franklin Street
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Franklin Street 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 Franklin Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Franklin Street Properties, you can compare the effects of market volatilities on Boston Properties and Franklin Street 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 Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Franklin Street.
Diversification Opportunities for Boston Properties and Franklin Street
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boston and Franklin is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Franklin Street Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Street Prop 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 Franklin Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Street Prop has no effect on the direction of Boston Properties i.e., Boston Properties and Franklin Street go up and down completely randomly.
Pair Corralation between Boston Properties and Franklin Street
Considering the 90-day investment horizon Boston Properties is expected to under-perform the Franklin Street. But the stock apears to be less risky and, when comparing its historical volatility, Boston Properties is 1.52 times less risky than Franklin Street. The stock trades about -0.11 of its potential returns per unit of risk. The Franklin Street Properties is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 194.00 in Franklin Street Properties on November 2, 2024 and sell it today you would lose (9.00) from holding Franklin Street Properties or give up 4.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Boston Properties vs. Franklin Street Properties
Performance |
| Timeline |
| Boston Properties |
| Franklin Street Prop |
Boston Properties and Franklin Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Franklin Street
The main advantage of trading using opposite Boston Properties and Franklin Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Franklin Street 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 Franklin Street will offset losses from the drop in Franklin Street'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 |
| Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties | Franklin Street vs. Douglas Emmett |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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