Correlation Between Boston Properties and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both Boston Properties and RBC Bearings 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 RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and RBC Bearings Incorporated, you can compare the effects of market volatilities on Boston Properties and RBC Bearings 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 RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and RBC Bearings.
Diversification Opportunities for Boston Properties and RBC Bearings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boston and RBC is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings 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 RBC Bearings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Bearings has no effect on the direction of Boston Properties i.e., Boston Properties and RBC Bearings go up and down completely randomly.
Pair Corralation between Boston Properties and RBC Bearings
Considering the 90-day investment horizon Boston Properties is expected to under-perform the RBC Bearings. In addition to that, Boston Properties is 1.8 times more volatile than RBC Bearings Incorporated. It trades about -0.01 of its total potential returns per unit of risk. RBC Bearings Incorporated is currently generating about 0.11 per unit of volatility. If you would invest 30,628 in RBC Bearings Incorporated on October 21, 2024 and sell it today you would earn a total of 581.00 from holding RBC Bearings Incorporated or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. RBC Bearings Incorporated
Performance |
| Timeline |
| Boston Properties |
| RBC Bearings |
Boston Properties and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and RBC Bearings
The main advantage of trading using opposite Boston Properties and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, RBC Bearings 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 RBC Bearings will offset losses from the drop in RBC Bearings' 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 |
| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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