Correlation Between Boston Properties and Life Time
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Life Time 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 Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Life Time Group, you can compare the effects of market volatilities on Boston Properties and Life Time 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 Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Life Time.
Diversification Opportunities for Boston Properties and Life Time
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boston and Life is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time Group 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 Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of Boston Properties i.e., Boston Properties and Life Time go up and down completely randomly.
Pair Corralation between Boston Properties and Life Time
Considering the 90-day investment horizon Boston Properties is expected to generate 0.71 times more return on investment than Life Time. However, Boston Properties is 1.41 times less risky than Life Time. It trades about 0.14 of its potential returns per unit of risk. Life Time Group is currently generating about 0.03 per unit of risk. If you would invest 7,342 in Boston Properties on August 31, 2024 and sell it today you would earn a total of 944.00 from holding Boston Properties or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Life Time Group
Performance |
| Timeline |
| Boston Properties |
| Life Time Group |
Boston Properties and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Life Time
The main advantage of trading using opposite Boston Properties and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time'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 |
| Life Time vs. Bowlero Corp | Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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