Correlation Between Sable Offshore and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Sable Offshore 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 Sable Offshore and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sable Offshore Corp and Boston Properties, you can compare the effects of market volatilities on Sable Offshore 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 Sable Offshore with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Boston Properties.
Diversification Opportunities for Sable Offshore and Boston Properties
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sable and Boston is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Sable Offshore 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 Sable Offshore Corp 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 Sable Offshore i.e., Sable Offshore and Boston Properties go up and down completely randomly.
Pair Corralation between Sable Offshore and Boston Properties
Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 1.57 times more return on investment than Boston Properties. However, Sable Offshore is 1.57 times more volatile than Boston Properties. It trades about 0.08 of its potential returns per unit of risk. Boston Properties is currently generating about 0.04 per unit of risk. If you would invest 1,012 in Sable Offshore Corp on November 30, 2024 and sell it today you would earn a total of 1,825 from holding Sable Offshore Corp or generate 180.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.94% |
| Values | Daily Returns |
Sable Offshore Corp vs. Boston Properties
Performance |
| Timeline |
| Sable Offshore Corp |
| Boston Properties |
Sable Offshore and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Boston Properties
The main advantage of trading using opposite Sable Offshore and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore 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.| Sable Offshore vs. Penn National Gaming | Sable Offshore vs. Take Two Interactive Software | Sable Offshore vs. Integrated Media Technology | Sable Offshore vs. NetEase |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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