Correlation Between Brandywine Realty and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Brandywine Realty 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 Brandywine Realty and Boston Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brandywine Realty Trust and Boston Properties, you can compare the effects of market volatilities on Brandywine Realty 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 Brandywine Realty with a short position of Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and Boston Properties.
Diversification Opportunities for Brandywine Realty and Boston Properties
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brandywine and Boston is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties and Brandywine Realty 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 Brandywine Realty Trust 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 Brandywine Realty i.e., Brandywine Realty and Boston Properties go up and down completely randomly.
Pair Corralation between Brandywine Realty and Boston Properties
Considering the 90-day investment horizon Brandywine Realty is expected to generate 1.76 times less return on investment than Boston Properties. In addition to that, Brandywine Realty is 1.05 times more volatile than Boston Properties. It trades about 0.05 of its total potential returns per unit of risk. Boston Properties is currently generating about 0.09 per unit of volatility. If you would invest 6,009 in Boston Properties on January 26, 2024 and sell it today you would earn a total of 285.00 from holding Boston Properties or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandywine Realty Trust vs. Boston Properties
Performance |
| Timeline |
| Brandywine Realty Trust |
| Boston Properties |
Brandywine Realty and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandywine Realty and Boston Properties
The main advantage of trading using opposite Brandywine Realty and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandywine Realty 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.| Brandywine Realty vs. Equity Commonwealth | Brandywine Realty vs. Piedmont Office Realty | Brandywine Realty vs. Hudson Pacific Properties |
| Boston Properties vs. Equity Commonwealth | Boston Properties vs. Piedmont Office Realty | Boston Properties vs. Hudson Pacific Properties |
Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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