Correlation Between Brandywine Realty and Crown Castle

Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and Crown Castle 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 Crown Castle 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 Crown Castle, you can compare the effects of market volatilities on Brandywine Realty and Crown Castle 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 Crown Castle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and Crown Castle.

Diversification Opportunities for Brandywine Realty and Crown Castle

-0.41

Correlation Coefficient

Brandywine Realty  Crown Castle

Very good diversification

The 3 months correlation between Brandywine and Crown is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Crown Castle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Castle 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 Crown Castle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Castle has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Crown Castle go up and down completely randomly.

Pair Corralation between Brandywine Realty and Crown Castle

Considering the 90-day investment horizon Brandywine Realty Trust is expected to generate 1.81 times more return on investment than Crown Castle. However, Brandywine Realty is 1.81 times more volatile than Crown Castle. It trades about 0.01 of its potential returns per unit of risk. Crown Castle is currently generating about 0.02 per unit of risk. If you would invest  463.00  in Brandywine Realty Trust on February 28, 2024 and sell it today you would earn a total of  0.90  from holding Brandywine Realty Trust or generate 0.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.47%
Values	Daily Returns

Brandywine Realty Trust  vs.  Crown Castle

Brandywine Realty Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brandywine Realty Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, Brandywine Realty displayed solid returns over the last few months and may actually be approaching a breakup point.

Crown Castle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Castle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Brandywine Realty and Crown Castle

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

The idea behind Brandywine Realty Trust and Crown Castle 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.