Correlation Between Brandywine Realty and Li Auto
Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and Li Auto 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 Li Auto 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 Li Auto, you can compare the effects of market volatilities on Brandywine Realty and Li Auto 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 Li Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and Li Auto.
Diversification Opportunities for Brandywine Realty and Li Auto
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Brandywine and Li Auto is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Li Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Auto 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 Li Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Auto has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Li Auto go up and down completely randomly.
Pair Corralation between Brandywine Realty and Li Auto
Considering the 90-day investment horizon Brandywine Realty Trust is expected to generate 0.86 times more return on investment than Li Auto. However, Brandywine Realty Trust is 1.17 times less risky than Li Auto. It trades about 0.05 of its potential returns per unit of risk. Li Auto is currently generating about -0.13 per unit of risk. If you would invest 526.00 in Brandywine Realty Trust on October 22, 2024 and sell it today you would earn a total of 9.00 from holding Brandywine Realty Trust or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandywine Realty Trust vs. Li Auto
Performance |
| Timeline |
| Brandywine Realty Trust |
| Li Auto |
Brandywine Realty and Li Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandywine Realty and Li Auto
The main advantage of trading using opposite Brandywine Realty and Li Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandywine Realty position performs unexpectedly, Li Auto 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 Li Auto will offset losses from the drop in Li Auto'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 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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