Correlation Between Made Tech and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Made Tech 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 Made Tech and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Made Tech Group and Boston Properties, you can compare the effects of market volatilities on Made Tech 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 Made Tech with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and Boston Properties.
Diversification Opportunities for Made Tech and Boston Properties
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Made and Boston is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Made Tech 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 Made Tech Group 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 Made Tech i.e., Made Tech and Boston Properties go up and down completely randomly.
Pair Corralation between Made Tech and Boston Properties
Assuming the 90 days trading horizon Made Tech Group is expected to generate 1.98 times more return on investment than Boston Properties. However, Made Tech is 1.98 times more volatile than Boston Properties. It trades about 0.04 of its potential returns per unit of risk. Boston Properties is currently generating about 0.07 per unit of risk. If you would invest 1,650 in Made Tech Group on September 12, 2024 and sell it today you would earn a total of 700.00 from holding Made Tech Group or generate 42.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.14% |
| Values | Daily Returns |
Made Tech Group vs. Boston Properties
Performance |
| Timeline |
| Made Tech Group |
| Boston Properties |
Made Tech and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and Boston Properties
The main advantage of trading using opposite Made Tech and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech 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.| Made Tech vs. Home Depot | Made Tech vs. Chrysalis Investments | Made Tech vs. Neometals | Made Tech vs. Coor Service Management |
| Boston Properties vs. Arrow Electronics | Boston Properties vs. Impax Environmental Markets | Boston Properties vs. Cairo Communication SpA | Boston Properties vs. Charter Communications Cl |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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