Correlation Between China Changjiang and Boston Properties
Can any of the company-specific risk be diversified away by investing in both China Changjiang and Boston 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 China Changjiang and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Changjiang Mining and Boston Properties, you can compare the effects of market volatilities on China Changjiang and Boston 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 China Changjiang with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Changjiang and Boston Properties.
Diversification Opportunities for China Changjiang and Boston Properties
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Boston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Changjiang Mining and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and China Changjiang 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 China Changjiang Mining are associated (or correlated) with Boston Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Properties has no effect on the direction of China Changjiang i.e., China Changjiang and Boston Properties go up and down completely randomly.
Pair Corralation between China Changjiang and Boston Properties
Given the investment horizon of 90 days China Changjiang Mining is expected to generate 22.92 times more return on investment than Boston Properties. However, China Changjiang is 22.92 times more volatile than Boston Properties. It trades about 0.07 of its potential returns per unit of risk. Boston Properties is currently generating about 0.04 per unit of risk. If you would invest 5.50 in China Changjiang Mining on September 3, 2024 and sell it today you would lose (2.73) from holding China Changjiang Mining or give up 49.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Changjiang Mining vs. Boston Properties
Performance |
| Timeline |
| China Changjiang Mining |
| Boston Properties |
China Changjiang and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Changjiang and Boston Properties
The main advantage of trading using opposite China Changjiang and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Changjiang position performs unexpectedly, Boston 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 Boston Properties will offset losses from the drop in Boston Properties' long position.| China Changjiang vs. Inflection Point Acquisition | China Changjiang vs. EMCOR Group | China Changjiang vs. Griffon | China Changjiang vs. Jacobs Solutions |
| Boston Properties vs. Office Properties Income | Boston Properties vs. SL Green Realty | Boston Properties vs. Highwoods Properties | Boston Properties vs. Equity Commonwealth |
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.
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