Correlation Between Alexandria Real and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both Alexandria Real 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 Alexandria Real and Brandywine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alexandria Real Estate and Brandywine Realty Trust, you can compare the effects of market volatilities on Alexandria Real 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 Alexandria Real with a short position of Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexandria Real and Brandywine Realty.
Diversification Opportunities for Alexandria Real and Brandywine Realty
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alexandria and Brandywine is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Alexandria Real Estate 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 Alexandria Real 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 Alexandria Real Estate 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 Alexandria Real i.e., Alexandria Real and Brandywine Realty go up and down completely randomly.
Pair Corralation between Alexandria Real and Brandywine Realty
Considering the 90-day investment horizon Alexandria Real Estate is expected to generate 0.74 times more return on investment than Brandywine Realty. However, Alexandria Real Estate is 1.35 times less risky than Brandywine Realty. It trades about -0.01 of its potential returns per unit of risk. Brandywine Realty Trust is currently generating about -0.07 per unit of risk. If you would invest 9,739 in Alexandria Real Estate on November 9, 2024 and sell it today you would lose (77.00) from holding Alexandria Real Estate or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alexandria Real Estate vs. Brandywine Realty Trust
Performance |
| Timeline |
| Alexandria Real Estate |
| Brandywine Realty Trust |
Alexandria Real and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alexandria Real and Brandywine Realty
The main advantage of trading using opposite Alexandria Real and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexandria Real 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.| Alexandria Real vs. Vornado Realty Trust | Alexandria Real vs. SL Green Realty | Alexandria Real vs. Kilroy Realty Corp | Alexandria Real vs. Highwoods Properties |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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