Correlation Between Qualys and Boston Properties

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

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

Diversification Opportunities for Qualys and Boston Properties

-0.37

Correlation Coefficient

Qualys  Boston Properties

Very good diversification

The 3 months correlation between Qualys and Boston is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Qualys Inc and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Qualys 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 Qualys Inc 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 Qualys i.e., Qualys and Boston Properties go up and down completely randomly.

Pair Corralation between Qualys and Boston Properties

Given the investment horizon of 90 days Qualys Inc is expected to generate 2.18 times more return on investment than Boston Properties. However, Qualys is 2.18 times more volatile than Boston Properties. It trades about 0.11 of its potential returns per unit of risk. Boston Properties is currently generating about -0.17 per unit of risk. If you would invest  12,191  in Qualys Inc on September 26, 2024 and sell it today you would earn a total of  1,968  from holding Qualys Inc or generate 16.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Qualys Inc  vs.  Boston Properties

Qualys Inc

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qualys Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Qualys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Boston Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Boston Properties is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Qualys and Boston Properties

The main advantage of trading using opposite Qualys and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qualys 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.

The idea behind Qualys Inc and Boston Properties 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..