Correlation Between Brandywine Realty and Nampak
Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and Nampak 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 Nampak 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 Nampak, you can compare the effects of market volatilities on Brandywine Realty and Nampak 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 Nampak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and Nampak.
Diversification Opportunities for Brandywine Realty and Nampak
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brandywine and Nampak is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Nampak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nampak 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 Nampak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nampak has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Nampak go up and down completely randomly.
Pair Corralation between Brandywine Realty and Nampak
Considering the 90-day investment horizon Brandywine Realty is expected to generate 312.98 times less return on investment than Nampak. But when comparing it to its historical volatility, Brandywine Realty Trust is 51.78 times less risky than Nampak. It trades about 0.02 of its potential returns per unit of risk. Nampak is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Nampak on September 3, 2024 and sell it today you would earn a total of 1,242 from holding Nampak or generate 15525.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 28.48% |
| Values | Daily Returns |
Brandywine Realty Trust vs. Nampak
Performance |
| Timeline |
| Brandywine Realty Trust |
| Nampak |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Brandywine Realty and Nampak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandywine Realty and Nampak
The main advantage of trading using opposite Brandywine Realty and Nampak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandywine Realty position performs unexpectedly, Nampak 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 Nampak will offset losses from the drop in Nampak'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 |
| Nampak vs. Xponential Fitness | Nampak vs. Sonida Senior Living | Nampak vs. Vita Coco | Nampak vs. Brandywine Realty Trust |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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