Correlation Between Boston Properties and Schnitzer Steel
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Schnitzer Steel 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 Schnitzer Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Schnitzer Steel Industries, you can compare the effects of market volatilities on Boston Properties and Schnitzer Steel 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 Schnitzer Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Schnitzer Steel.
Diversification Opportunities for Boston Properties and Schnitzer Steel
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Boston and Schnitzer is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Schnitzer Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schnitzer Steel Indu 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 Schnitzer Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schnitzer Steel Indu has no effect on the direction of Boston Properties i.e., Boston Properties and Schnitzer Steel go up and down completely randomly.
Pair Corralation between Boston Properties and Schnitzer Steel
Considering the 90-day investment horizon Boston Properties is expected to generate 0.42 times more return on investment than Schnitzer Steel. However, Boston Properties is 2.37 times less risky than Schnitzer Steel. It trades about 0.17 of its potential returns per unit of risk. Schnitzer Steel Industries is currently generating about 0.07 per unit of risk. If you would invest 5,760 in Boston Properties on September 5, 2024 and sell it today you would earn a total of 2,255 from holding Boston Properties or generate 39.15% 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. Schnitzer Steel Industries
Performance |
| Timeline |
| Boston Properties |
| Schnitzer Steel Indu |
Boston Properties and Schnitzer Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Schnitzer Steel
The main advantage of trading using opposite Boston Properties and Schnitzer Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Schnitzer Steel 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 Schnitzer Steel will offset losses from the drop in Schnitzer Steel'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 |
| Schnitzer Steel vs. NETGEAR | Schnitzer Steel vs. MI Homes | Schnitzer Steel vs. Northstar Clean Technologies | Schnitzer Steel vs. Boston Properties |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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