Correlation Between Great Portland and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Great Portland 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 Great Portland and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Portland Estates and Boston Properties, you can compare the effects of market volatilities on Great Portland 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 Great Portland with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Portland and Boston Properties.
Diversification Opportunities for Great Portland and Boston Properties
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and Boston is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Great Portland Estates and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Great Portland 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 Great Portland Estates 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 Great Portland i.e., Great Portland and Boston Properties go up and down completely randomly.
Pair Corralation between Great Portland and Boston Properties
Assuming the 90 days trading horizon Great Portland Estates is expected to under-perform the Boston Properties. In addition to that, Great Portland is 1.18 times more volatile than Boston Properties. It trades about -0.02 of its total potential returns per unit of risk. Boston Properties is currently generating about 0.04 per unit of volatility. If you would invest 5,602 in Boston Properties on September 3, 2024 and sell it today you would earn a total of 2,134 from holding Boston Properties or generate 38.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Portland Estates vs. Boston Properties
Performance |
| Timeline |
| Great Portland Estates |
| Boston Properties |
Great Portland and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Portland and Boston Properties
The main advantage of trading using opposite Great Portland and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Portland 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.| Great Portland vs. Boston Properties | Great Portland vs. COUSINS PTIES INC | Great Portland vs. Office Properties Income | Great Portland vs. CREMECOMTRSBI DL 001 |
| Boston Properties vs. USWE SPORTS AB | Boston Properties vs. Fukuyama Transporting Co | Boston Properties vs. SCIENCE IN SPORT | Boston Properties vs. CarsalesCom |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |