Correlation Between Brandywine Realty and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and RCI Hospitality 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 RCI Hospitality 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 RCI Hospitality Holdings, you can compare the effects of market volatilities on Brandywine Realty and RCI Hospitality 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 RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and RCI Hospitality.
Diversification Opportunities for Brandywine Realty and RCI Hospitality
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brandywine and RCI is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and RCI Hospitality Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCI Hospitality Holdings 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 RCI Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCI Hospitality Holdings has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and RCI Hospitality go up and down completely randomly.
Pair Corralation between Brandywine Realty and RCI Hospitality
Considering the 90-day investment horizon Brandywine Realty Trust is expected to generate 1.25 times more return on investment than RCI Hospitality. However, Brandywine Realty is 1.25 times more volatile than RCI Hospitality Holdings. It trades about 0.03 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about -0.03 per unit of risk. If you would invest 481.00 in Brandywine Realty Trust on August 29, 2024 and sell it today you would earn a total of 89.00 from holding Brandywine Realty Trust or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandywine Realty Trust vs. RCI Hospitality Holdings
Performance |
| Timeline |
| Brandywine Realty Trust |
| RCI Hospitality Holdings |
Brandywine Realty and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandywine Realty and RCI Hospitality
The main advantage of trading using opposite Brandywine Realty and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandywine Realty position performs unexpectedly, RCI Hospitality 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 RCI Hospitality will offset losses from the drop in RCI Hospitality'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 |
| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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