Correlation Between Global Medical and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Global Medical 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 Global Medical and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Medical REIT and Boston Properties, you can compare the effects of market volatilities on Global Medical 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 Global Medical with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Medical and Boston Properties.
Diversification Opportunities for Global Medical and Boston Properties
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Boston is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Global Medical REIT and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Global Medical 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 Global Medical REIT 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 Global Medical i.e., Global Medical and Boston Properties go up and down completely randomly.
Pair Corralation between Global Medical and Boston Properties
Given the investment horizon of 90 days Global Medical REIT is expected to generate 0.74 times more return on investment than Boston Properties. However, Global Medical REIT is 1.36 times less risky than Boston Properties. It trades about 0.27 of its potential returns per unit of risk. Boston Properties is currently generating about -0.03 per unit of risk. If you would invest 753.00 in Global Medical REIT on November 30, 2024 and sell it today you would earn a total of 127.00 from holding Global Medical REIT or generate 16.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Medical REIT vs. Boston Properties
Performance |
| Timeline |
| Global Medical REIT |
| Boston Properties |
Global Medical and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Medical and Boston Properties
The main advantage of trading using opposite Global Medical and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Medical 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.| Global Medical vs. Healthpeak Properties | Global Medical vs. Ventas Inc | Global Medical vs. National Health Investors | Global Medical vs. Sabra Healthcare REIT |
| Boston Properties vs. SL Green Realty | Boston Properties vs. Douglas Emmett | Boston Properties vs. Kilroy Realty Corp | Boston Properties vs. Alexandria Real Estate |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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