Correlation Between United Homes and Boston Properties
Can any of the company-specific risk be diversified away by investing in both United Homes 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 United Homes and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Homes Group and Boston Properties, you can compare the effects of market volatilities on United Homes 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 United Homes with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Homes and Boston Properties.
Diversification Opportunities for United Homes and Boston Properties
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Boston is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding United Homes Group and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and United Homes 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 United Homes 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 United Homes i.e., United Homes and Boston Properties go up and down completely randomly.
Pair Corralation between United Homes and Boston Properties
Considering the 90-day investment horizon United Homes Group is expected to generate 2.82 times more return on investment than Boston Properties. However, United Homes is 2.82 times more volatile than Boston Properties. It trades about 0.01 of its potential returns per unit of risk. Boston Properties is currently generating about 0.04 per unit of risk. If you would invest 1,004 in United Homes Group on August 24, 2024 and sell it today you would lose (394.00) from holding United Homes Group or give up 39.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Homes Group vs. Boston Properties
Performance |
| Timeline |
| United Homes Group |
| Boston Properties |
United Homes and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Homes and Boston Properties
The main advantage of trading using opposite United Homes and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Homes 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.| United Homes vs. Skyline | United Homes vs. Green Brick Partners | United Homes vs. Legacy Housing Corp | United Homes vs. Hovnanian Enterprises PFD |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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