Correlation Between Reservoir Media and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Reservoir Media 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 Reservoir Media and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reservoir Media and Boston Properties, you can compare the effects of market volatilities on Reservoir Media 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 Reservoir Media with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reservoir Media and Boston Properties.
Diversification Opportunities for Reservoir Media and Boston Properties
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Reservoir and Boston is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Reservoir Media and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Reservoir Media 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 Reservoir Media 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 Reservoir Media i.e., Reservoir Media and Boston Properties go up and down completely randomly.
Pair Corralation between Reservoir Media and Boston Properties
Given the investment horizon of 90 days Reservoir Media is expected to generate 1.52 times more return on investment than Boston Properties. However, Reservoir Media is 1.52 times more volatile than Boston Properties. It trades about 0.21 of its potential returns per unit of risk. Boston Properties is currently generating about -0.2 per unit of risk. If you would invest 845.00 in Reservoir Media on August 24, 2024 and sell it today you would earn a total of 98.00 from holding Reservoir Media or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reservoir Media vs. Boston Properties
Performance |
| Timeline |
| Reservoir Media |
| Boston Properties |
Reservoir Media and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reservoir Media and Boston Properties
The main advantage of trading using opposite Reservoir Media and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reservoir Media 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.| Reservoir Media vs. Reading International | Reservoir Media vs. Marcus | Reservoir Media vs. Gaia Inc | Reservoir Media vs. News Corp B |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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