Correlation Between Boston Properties and SilverBox Corp

Can any of the company-specific risk be diversified away by investing in both Boston Properties and SilverBox Corp 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 Boston Properties and SilverBox Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boston Properties and SilverBox Corp III, you can compare the effects of market volatilities on Boston Properties and SilverBox Corp 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 Boston Properties with a short position of SilverBox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and SilverBox Corp.

Diversification Opportunities for Boston Properties and SilverBox Corp

0.07

Correlation Coefficient

Boston Properties  SilverBox Corp

Significant diversification

The 3 months correlation between Boston and SilverBox is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and SilverBox Corp III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverBox Corp III and Boston Properties 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 Boston Properties are associated (or correlated) with SilverBox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverBox Corp III has no effect on the direction of Boston Properties i.e., Boston Properties and SilverBox Corp go up and down completely randomly.

Pair Corralation between Boston Properties and SilverBox Corp

Considering the 90-day investment horizon Boston Properties is expected to generate 1.03 times less return on investment than SilverBox Corp. But when comparing it to its historical volatility, Boston Properties is 1.28 times less risky than SilverBox Corp. It trades about 0.02 of its potential returns per unit of risk. SilverBox Corp III is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,076  in SilverBox Corp III on September 17, 2024 and sell it today you would earn a total of  8.00  from holding SilverBox Corp III or generate 0.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	55.38%
Values	Daily Returns

Boston Properties  vs.  SilverBox Corp III

Boston Properties

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Boston Properties is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

SilverBox Corp III

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days SilverBox Corp III has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SilverBox Corp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Boston Properties and SilverBox Corp

The main advantage of trading using opposite Boston Properties and SilverBox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties position performs unexpectedly, SilverBox Corp 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 SilverBox Corp will offset losses from the drop in SilverBox Corp's long position.

The idea behind Boston Properties and SilverBox Corp III pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.