Correlation Between Boston Properties and VICI Properties

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Can any of the company-specific risk be diversified away by investing in both Boston Properties and VICI Properties 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 VICI Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and VICI Properties, you can compare the effects of market volatilities on Boston Properties and VICI Properties 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 VICI Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and VICI Properties.

Diversification Opportunities for Boston Properties and VICI Properties

BostonVICIDiversified AwayBostonVICIDiversified Away100%
0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Boston and VICI is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and VICI Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VICI Properties 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 VICI Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VICI Properties has no effect on the direction of Boston Properties i.e., Boston Properties and VICI Properties go up and down completely randomly.

Pair Corralation between Boston Properties and VICI Properties

Considering the 90-day investment horizon Boston Properties is expected to generate 1.92 times more return on investment than VICI Properties. However, Boston Properties is 1.92 times more volatile than VICI Properties. It trades about 0.05 of its potential returns per unit of risk. VICI Properties is currently generating about 0.02 per unit of risk. If you would invest  4,749  in Boston Properties on November 27, 2024 and sell it today you would earn a total of  2,135  from holding Boston Properties or generate 44.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Boston Properties  vs.  VICI Properties

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505
JavaScript chart by amCharts 3.21.15BXP VICI
       Timeline  
Boston Properties 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Boston Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb687072747678808284
VICI Properties 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days VICI Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, VICI Properties is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2829303132

Boston Properties and VICI Properties Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.25-2.43-1.62-0.80.00.741.492.242.99 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15BXP VICI
       Returns  

Pair Trading with Boston Properties and VICI Properties

The main advantage of trading using opposite Boston Properties and VICI Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, VICI Properties 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 VICI Properties will offset losses from the drop in VICI Properties' long position.
The idea behind Boston Properties and VICI Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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