Correlation Between Brandywine Realty and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment, you can compare the effects of market volatilities on Brandywine Realty and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and PennantPark Investment.
Diversification Opportunities for Brandywine Realty and PennantPark Investment
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brandywine and PennantPark is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and PennantPark Investment go up and down completely randomly.
Pair Corralation between Brandywine Realty and PennantPark Investment
Considering the 90-day investment horizon Brandywine Realty is expected to generate 1.44 times less return on investment than PennantPark Investment. In addition to that, Brandywine Realty is 2.22 times more volatile than PennantPark Investment. It trades about 0.02 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.07 per unit of volatility. If you would invest 449.00 in PennantPark Investment on September 3, 2024 and sell it today you would earn a total of 228.00 from holding PennantPark Investment or generate 50.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandywine Realty Trust vs. PennantPark Investment
Performance |
| Timeline |
| Brandywine Realty Trust |
| PennantPark Investment |
Brandywine Realty and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandywine Realty and PennantPark Investment
The main advantage of trading using opposite Brandywine Realty and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandywine Realty position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment'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 |
| PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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