Correlation Between Boston Properties and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Iron Mountain 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 Iron Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Iron Mountain Incorporated, you can compare the effects of market volatilities on Boston Properties and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Iron Mountain.
Diversification Opportunities for Boston Properties and Iron Mountain
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boston and Iron is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Iron Mountain Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of Boston Properties i.e., Boston Properties and Iron Mountain go up and down completely randomly.
Pair Corralation between Boston Properties and Iron Mountain
Considering the 90-day investment horizon Boston Properties is expected to under-perform the Iron Mountain. But the stock apears to be less risky and, when comparing its historical volatility, Boston Properties is 1.58 times less risky than Iron Mountain. The stock trades about -0.1 of its potential returns per unit of risk. The Iron Mountain Incorporated is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 12,760 in Iron Mountain Incorporated on August 30, 2024 and sell it today you would lose (336.00) from holding Iron Mountain Incorporated or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Iron Mountain Incorporated
Performance |
| Timeline |
| Boston Properties |
| Iron Mountain |
Boston Properties and Iron Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Iron Mountain
The main advantage of trading using opposite Boston Properties and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain'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 |
| Iron Mountain vs. Equinix | Iron Mountain vs. Crown Castle | Iron Mountain vs. American Tower Corp | Iron Mountain vs. Hannon Armstrong Sustainable |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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