Correlation Between Boston Properties and GAIL (India)
Can any of the company-specific risk be diversified away by investing in both Boston Properties and GAIL (India) 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 GAIL (India) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and GAIL Limited, you can compare the effects of market volatilities on Boston Properties and GAIL (India) 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 GAIL (India). Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and GAIL (India).
Diversification Opportunities for Boston Properties and GAIL (India)
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boston and GAIL is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and GAIL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAIL Limited 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 GAIL (India). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAIL Limited has no effect on the direction of Boston Properties i.e., Boston Properties and GAIL (India) go up and down completely randomly.
Pair Corralation between Boston Properties and GAIL (India)
Considering the 90-day investment horizon Boston Properties is expected to generate 4.61 times less return on investment than GAIL (India). But when comparing it to its historical volatility, Boston Properties is 2.36 times less risky than GAIL (India). It trades about 0.04 of its potential returns per unit of risk. GAIL Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 659.00 in GAIL Limited on September 5, 2024 and sell it today you would earn a total of 998.00 from holding GAIL Limited or generate 151.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.17% |
| Values | Daily Returns |
Boston Properties vs. GAIL Limited
Performance |
| Timeline |
| Boston Properties |
| GAIL Limited |
Boston Properties and GAIL (India) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and GAIL (India)
The main advantage of trading using opposite Boston Properties and GAIL (India) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, GAIL (India) 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 GAIL (India) will offset losses from the drop in GAIL (India)'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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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