Correlation Between Boston Properties and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Boston Properties and National CineMedia 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 National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and National CineMedia, you can compare the effects of market volatilities on Boston Properties and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and National CineMedia.
Diversification Opportunities for Boston Properties and National CineMedia
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Boston and National is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Boston Properties i.e., Boston Properties and National CineMedia go up and down completely randomly.
Pair Corralation between Boston Properties and National CineMedia
Considering the 90-day investment horizon Boston Properties is expected to generate 0.42 times more return on investment than National CineMedia. However, Boston Properties is 2.36 times less risky than National CineMedia. It trades about 0.13 of its potential returns per unit of risk. National CineMedia is currently generating about -0.03 per unit of risk. If you would invest 7,916 in Boston Properties on September 2, 2024 and sell it today you would earn a total of 283.00 from holding Boston Properties or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. National CineMedia
Performance |
| Timeline |
| Boston Properties |
| National CineMedia |
Boston Properties and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and National CineMedia
The main advantage of trading using opposite Boston Properties and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| Boston Properties vs. Douglas Emmett | Boston Properties vs. Vornado Realty Trust | Boston Properties vs. Highwoods Properties | Boston Properties vs. Piedmont Office Realty |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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