Correlation Between Brandywine Realty and SL Green
Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and SL Green 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 SL Green 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 SL Green Realty, you can compare the effects of market volatilities on Brandywine Realty and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and SL Green.
Diversification Opportunities for Brandywine Realty and SL Green
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brandywine and SLG is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and SL Green go up and down completely randomly.
Pair Corralation between Brandywine Realty and SL Green
Considering the 90-day investment horizon Brandywine Realty is expected to generate 1.44 times less return on investment than SL Green. In addition to that, Brandywine Realty is 1.02 times more volatile than SL Green Realty. It trades about 0.09 of its total potential returns per unit of risk. SL Green Realty is currently generating about 0.14 per unit of volatility. If you would invest 4,688 in SL Green Realty on August 27, 2024 and sell it today you would earn a total of 3,275 from holding SL Green Realty or generate 69.86% 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. SL Green Realty
Performance |
| Timeline |
| Brandywine Realty Trust |
| SL Green Realty |
Brandywine Realty and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandywine Realty and SL Green
The main advantage of trading using opposite Brandywine Realty and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandywine Realty position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green'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 |
| SL Green vs. Boston Properties | SL Green vs. Douglas Emmett | SL Green vs. Kilroy Realty Corp | SL Green vs. Alexandria Real Estate |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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