Correlation Between BJs Restaurants and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Brandywine Realty 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 BJs Restaurants and Brandywine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Brandywine Realty Trust, you can compare the effects of market volatilities on BJs Restaurants and Brandywine Realty 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 BJs Restaurants with a short position of Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Brandywine Realty.
Diversification Opportunities for BJs Restaurants and Brandywine Realty
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BJs and Brandywine is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Brandywine Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandywine Realty Trust and BJs Restaurants 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 BJs Restaurants are associated (or correlated) with Brandywine Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandywine Realty Trust has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Brandywine Realty go up and down completely randomly.
Pair Corralation between BJs Restaurants and Brandywine Realty
Given the investment horizon of 90 days BJs Restaurants is expected to generate 2.24 times less return on investment than Brandywine Realty. In addition to that, BJs Restaurants is 1.75 times more volatile than Brandywine Realty Trust. It trades about 0.07 of its total potential returns per unit of risk. Brandywine Realty Trust is currently generating about 0.27 per unit of volatility. If you would invest 507.00 in Brandywine Realty Trust on September 1, 2024 and sell it today you would earn a total of 53.00 from holding Brandywine Realty Trust or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Brandywine Realty Trust
Performance |
| Timeline |
| BJs Restaurants |
| Brandywine Realty Trust |
BJs Restaurants and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Brandywine Realty
The main advantage of trading using opposite BJs Restaurants and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Brandywine Realty 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 Brandywine Realty will offset losses from the drop in Brandywine Realty's long position.| BJs Restaurants vs. Dine Brands Global | BJs Restaurants vs. Brinker International | BJs Restaurants vs. Bloomin Brands | BJs Restaurants vs. The Cheesecake Factory |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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