Correlation Between SmartStop Self and Boston Properties

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

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

Diversification Opportunities for SmartStop Self and Boston Properties

0.87

Correlation Coefficient

SmartStop Self  Boston Properties

Very poor diversification

The 3 months correlation between SmartStop and Boston is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SmartStop Self Storage and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and SmartStop Self 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 SmartStop Self Storage 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 SmartStop Self i.e., SmartStop Self and Boston Properties go up and down completely randomly.

Pair Corralation between SmartStop Self and Boston Properties

Considering the 90-day investment horizon SmartStop Self Storage is expected to under-perform the Boston Properties. In addition to that, SmartStop Self is 1.12 times more volatile than Boston Properties. It trades about -0.12 of its total potential returns per unit of risk. Boston Properties is currently generating about 0.06 per unit of volatility. If you would invest  7,173  in Boston Properties on July 11, 2025 and sell it today you would earn a total of  130.00  from holding Boston Properties or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.65%
Values	Daily Returns

SmartStop Self Storage  vs.  Boston Properties

SmartStop Self Storage

Risk-Adjusted Performance

Weak

Over the last 90 days SmartStop Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, SmartStop Self is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Boston Properties

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Properties are ranked lower than 3 (%) 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 SmartStop Self and Boston Properties

The main advantage of trading using opposite SmartStop Self and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartStop Self 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 SmartStop Self Storage 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.