Correlation Between Brandywine Realty and Kilroy Realty
Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and Kilroy 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 Brandywine Realty and Kilroy Realty 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 Kilroy Realty Corp, you can compare the effects of market volatilities on Brandywine Realty and Kilroy 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 Brandywine Realty with a short position of Kilroy Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and Kilroy Realty.
Diversification Opportunities for Brandywine Realty and Kilroy Realty
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brandywine and Kilroy is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Kilroy Realty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilroy Realty Corp 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 Kilroy Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilroy Realty Corp has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Kilroy Realty go up and down completely randomly.
Pair Corralation between Brandywine Realty and Kilroy Realty
Considering the 90-day investment horizon Brandywine Realty Trust is expected to generate 1.17 times more return on investment than Kilroy Realty. However, Brandywine Realty is 1.17 times more volatile than Kilroy Realty Corp. It trades about 0.09 of its potential returns per unit of risk. Kilroy Realty Corp is currently generating about 0.04 per unit of risk. If you would invest 391.00 in Brandywine Realty Trust on August 27, 2024 and sell it today you would earn a total of 164.00 from holding Brandywine Realty Trust or generate 41.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandywine Realty Trust vs. Kilroy Realty Corp
Performance |
| Timeline |
| Brandywine Realty Trust |
| Kilroy Realty Corp |
Brandywine Realty and Kilroy Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandywine Realty and Kilroy Realty
The main advantage of trading using opposite Brandywine Realty and Kilroy Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandywine Realty position performs unexpectedly, Kilroy 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 Kilroy Realty will offset losses from the drop in Kilroy Realty's long position.| Brandywine Realty vs. Douglas Emmett | Brandywine Realty vs. Kilroy Realty Corp | Brandywine Realty vs. Piedmont Office Realty | Brandywine Realty vs. City Office |
| Kilroy Realty vs. Hudson Pacific Properties | Kilroy Realty vs. Highwoods Properties | Kilroy Realty vs. Cousins Properties Incorporated | Kilroy Realty vs. Piedmont Office Realty |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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