Correlation Between Brandywine Realty and Telephone

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

Diversification Opportunities for Brandywine Realty and Telephone

0.59

Correlation Coefficient

Brandywine Realty  Telephone

Very weak diversification

The 3 months correlation between Brandywine and Telephone is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Telephone and Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telephone and Data 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 Telephone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telephone and Data has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Telephone go up and down completely randomly.

Pair Corralation between Brandywine Realty and Telephone

Considering the 90-day investment horizon Brandywine Realty Trust is expected to under-perform the Telephone. But the stock apears to be less risky and, when comparing its historical volatility, Brandywine Realty Trust is 2.01 times less risky than Telephone. The stock trades about -0.02 of its potential returns per unit of risk. The Telephone and Data is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,484  in Telephone and Data on March 17, 2024 and sell it today you would earn a total of  526.00  from holding Telephone and Data or generate 35.44% 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.  Telephone and Data

Brandywine Realty Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brandywine Realty Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Brandywine Realty may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Telephone and Data

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Brandywine Realty and Telephone

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

The idea behind Brandywine Realty Trust and Telephone and Data 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.