Correlation Between Aspen Insurance and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Brandywine Realty 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 Aspen Insurance and Brandywine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Insurance Holdings and Brandywine Realty Trust, you can compare the effects of market volatilities on Aspen Insurance and Brandywine Realty 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 Aspen Insurance with a short position of Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Brandywine Realty.
Diversification Opportunities for Aspen Insurance and Brandywine Realty
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aspen and Brandywine is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Brandywine Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandywine Realty Trust and Aspen Insurance 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 Aspen Insurance Holdings are associated (or correlated) with Brandywine Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandywine Realty Trust has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Brandywine Realty go up and down completely randomly.
Pair Corralation between Aspen Insurance and Brandywine Realty
Assuming the 90 days trading horizon Aspen Insurance is expected to generate 2.03 times less return on investment than Brandywine Realty. But when comparing it to its historical volatility, Aspen Insurance Holdings is 1.08 times less risky than Brandywine Realty. It trades about 0.12 of its potential returns per unit of risk. Brandywine Realty Trust is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 518.00 in Brandywine Realty Trust on September 3, 2024 and sell it today you would earn a total of 42.00 from holding Brandywine Realty Trust or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Brandywine Realty Trust
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Brandywine Realty Trust |
Aspen Insurance and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Brandywine Realty
The main advantage of trading using opposite Aspen Insurance and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Brandywine Realty 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 Brandywine Realty will offset losses from the drop in Brandywine Realty's long position.| Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. Selective Insurance Group | Aspen Insurance vs. The Allstate | Aspen Insurance vs. AmTrust Financial Services |
| Brandywine Realty vs. Douglas Emmett | Brandywine Realty vs. Kilroy Realty Corp | Brandywine Realty vs. Piedmont Office Realty | Brandywine Realty vs. City Office |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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