Correlation Between Boston Properties and Riocan REIT
Can any of the company-specific risk be diversified away by investing in both Boston Properties and Riocan REIT 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 Riocan REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Riocan REIT, you can compare the effects of market volatilities on Boston Properties and Riocan REIT 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 Riocan REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Riocan REIT.
Diversification Opportunities for Boston Properties and Riocan REIT
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Boston and Riocan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Riocan REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riocan REIT 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 Riocan REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riocan REIT has no effect on the direction of Boston Properties i.e., Boston Properties and Riocan REIT go up and down completely randomly.
Pair Corralation between Boston Properties and Riocan REIT
Considering the 90-day investment horizon Boston Properties is expected to generate 1.25 times more return on investment than Riocan REIT. However, Boston Properties is 1.25 times more volatile than Riocan REIT. It trades about -0.12 of its potential returns per unit of risk. Riocan REIT is currently generating about -0.16 per unit of risk. If you would invest 8,739 in Boston Properties on August 29, 2024 and sell it today you would lose (417.00) from holding Boston Properties or give up 4.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Riocan REIT
Performance |
| Timeline |
| Boston Properties |
| Riocan REIT |
Boston Properties and Riocan REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Riocan REIT
The main advantage of trading using opposite Boston Properties and Riocan REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, Riocan REIT 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 Riocan REIT will offset losses from the drop in Riocan REIT's long position.| Boston Properties vs. Office Properties Income | Boston Properties vs. SL Green Realty | Boston Properties vs. Highwoods Properties | Boston Properties vs. Equity Commonwealth |
| Riocan REIT vs. Boston Properties | Riocan REIT vs. Kilroy Realty Corp | Riocan REIT vs. SL Green Realty | Riocan REIT vs. Vornado Realty Trust |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| CEOs Directory Screen CEOs from public companies around the world |