Correlation Between Postal Realty and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Postal Realty 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 Postal Realty and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Realty Trust and Boston Properties, you can compare the effects of market volatilities on Postal Realty 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 Postal Realty with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Realty and Boston Properties.
Diversification Opportunities for Postal Realty and Boston Properties
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Postal and Boston is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Postal Realty Trust and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Postal Realty 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 Postal Realty Trust 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 Postal Realty i.e., Postal Realty and Boston Properties go up and down completely randomly.
Pair Corralation between Postal Realty and Boston Properties
Given the investment horizon of 90 days Postal Realty is expected to generate 4.68 times less return on investment than Boston Properties. But when comparing it to its historical volatility, Postal Realty Trust is 1.74 times less risky than Boston Properties. It trades about 0.05 of its potential returns per unit of risk. Boston Properties is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5,987 in Boston Properties on September 3, 2024 and sell it today you would earn a total of 2,212 from holding Boston Properties or generate 36.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Realty Trust vs. Boston Properties
Performance |
| Timeline |
| Postal Realty Trust |
| Boston Properties |
Postal Realty and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Realty and Boston Properties
The main advantage of trading using opposite Postal Realty and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Realty 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.| Postal Realty vs. Office Properties Income | Postal Realty vs. SL Green Realty | Postal Realty vs. Highwoods Properties | Postal Realty vs. Equity Commonwealth |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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