Correlation Between Four Corners and Boston Properties

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

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

Diversification Opportunities for Four Corners and Boston Properties

-0.11

Correlation Coefficient

Four Corners  Boston Properties

Good diversification

The 3 months correlation between Four and Boston is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Four Corners Property and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Four Corners 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 Four Corners Property 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 Four Corners i.e., Four Corners and Boston Properties go up and down completely randomly.

Pair Corralation between Four Corners and Boston Properties

Given the investment horizon of 90 days Four Corners Property is expected to under-perform the Boston Properties. But the stock apears to be less risky and, when comparing its historical volatility, Four Corners Property is 1.78 times less risky than Boston Properties. The stock trades about -0.1 of its potential returns per unit of risk. The Boston Properties is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  6,382  in Boston Properties on May 5, 2025 and sell it today you would earn a total of  80.00  from holding Boston Properties or generate 1.25% return on investment over 90 days.

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

Four Corners Property  vs.  Boston Properties

Four Corners Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Four Corners Property has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Boston Properties

Risk-Adjusted Performance

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 recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Four Corners and Boston Properties

The main advantage of trading using opposite Four Corners and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Corners 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 Four Corners Property 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 Global Correlations module to find global opportunities by holding instruments from different markets.