Correlation Between Boardwalk Real and Dream Office

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

By analyzing existing cross correlation between Boardwalk Real Estate and Dream Office Real, you can compare the effects of market volatilities on Boardwalk Real and Dream Office 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 Boardwalk Real with a short position of Dream Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boardwalk Real and Dream Office.

Diversification Opportunities for Boardwalk Real and Dream Office

0.85

Correlation Coefficient

Boardwalk Real  Dream Office

Very poor diversification

The 3 months correlation between Boardwalk and Dream is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Boardwalk Real Estate and Dream Office Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Office Real and Boardwalk Real 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 Boardwalk Real Estate are associated (or correlated) with Dream Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Office Real has no effect on the direction of Boardwalk Real i.e., Boardwalk Real and Dream Office go up and down completely randomly.

Pair Corralation between Boardwalk Real and Dream Office

Assuming the 90 days trading horizon Boardwalk Real is expected to generate 1.17 times less return on investment than Dream Office. But when comparing it to its historical volatility, Boardwalk Real Estate is 1.88 times less risky than Dream Office. It trades about 0.13 of its potential returns per unit of risk. Dream Office Real is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,475  in Dream Office Real on May 6, 2025 and sell it today you would earn a total of  167.00  from holding Dream Office Real or generate 11.32% return on investment over 90 days.

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

Boardwalk Real Estate  vs.  Dream Office Real

Boardwalk Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boardwalk Real Estate are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Boardwalk Real may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Dream Office Real

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dream Office Real are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Dream Office may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Boardwalk Real and Dream Office

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

The idea behind Boardwalk Real Estate and Dream Office Real 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.