Correlation Between Boston Properties and LXP Industrial
Can any of the company-specific risk be diversified away by investing in both Boston Properties and LXP Industrial 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 LXP Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and LXP Industrial Trust, you can compare the effects of market volatilities on Boston Properties and LXP Industrial 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 LXP Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and LXP Industrial.
Diversification Opportunities for Boston Properties and LXP Industrial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and LXP is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and LXP Industrial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LXP Industrial Trust 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 LXP Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LXP Industrial Trust has no effect on the direction of Boston Properties i.e., Boston Properties and LXP Industrial go up and down completely randomly.
Pair Corralation between Boston Properties and LXP Industrial
Considering the 90-day investment horizon Boston Properties is expected to generate 1.13 times less return on investment than LXP Industrial. In addition to that, Boston Properties is 1.32 times more volatile than LXP Industrial Trust. It trades about 0.09 of its total potential returns per unit of risk. LXP Industrial Trust is currently generating about 0.13 per unit of volatility. If you would invest 802.00 in LXP Industrial Trust on November 9, 2024 and sell it today you would earn a total of 36.00 from holding LXP Industrial Trust or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Boston Properties vs. LXP Industrial Trust
Performance |
| Timeline |
| Boston Properties |
| LXP Industrial Trust |
Boston Properties and LXP Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and LXP Industrial
The main advantage of trading using opposite Boston Properties and LXP Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, LXP Industrial 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 LXP Industrial will offset losses from the drop in LXP Industrial'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 |
| LXP Industrial vs. First Industrial Realty | LXP Industrial vs. Plymouth Industrial REIT | LXP Industrial vs. Global Self Storage | LXP Industrial vs. Terreno Realty |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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