Correlation Between Boston Properties and Gladstone Commercial
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Gladstone Commercial 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 Gladstone Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Gladstone Commercial, you can compare the effects of market volatilities on Boston Properties and Gladstone Commercial 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 Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Gladstone Commercial.
Diversification Opportunities for Boston Properties and Gladstone Commercial
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Boston and Gladstone is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Gladstone Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial 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 Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial has no effect on the direction of Boston Properties i.e., Boston Properties and Gladstone Commercial go up and down completely randomly.
Pair Corralation between Boston Properties and Gladstone Commercial
Considering the 90-day investment horizon Boston Properties is expected to generate 1.31 times more return on investment than Gladstone Commercial. However, Boston Properties is 1.31 times more volatile than Gladstone Commercial. It trades about 0.15 of its potential returns per unit of risk. Gladstone Commercial is currently generating about 0.15 per unit of risk. If you would invest 5,973 in Boston Properties on September 14, 2024 and sell it today you would earn a total of 2,026 from holding Boston Properties or generate 33.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Gladstone Commercial
Performance |
| Timeline |
| Boston Properties |
| Gladstone Commercial |
Boston Properties and Gladstone Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Gladstone Commercial
The main advantage of trading using opposite Boston Properties and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Gladstone Commercial 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 Gladstone Commercial will offset losses from the drop in Gladstone Commercial'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 |
| Gladstone Commercial vs. Gladstone Investment | Gladstone Commercial vs. Gladstone Capital | Gladstone Commercial vs. LTC Properties | Gladstone Commercial vs. Dynex Capital |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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