Correlation Between Hudson Pacific and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both Hudson Pacific 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 Hudson Pacific and Brandywine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Pacific Properties and Brandywine Realty Trust, you can compare the effects of market volatilities on Hudson Pacific 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 Hudson Pacific with a short position of Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Pacific and Brandywine Realty.
Diversification Opportunities for Hudson Pacific and Brandywine Realty
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hudson and Brandywine is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Pacific Properties 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 Hudson Pacific 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 Hudson Pacific Properties 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 Hudson Pacific i.e., Hudson Pacific and Brandywine Realty go up and down completely randomly.
Pair Corralation between Hudson Pacific and Brandywine Realty
Considering the 90-day investment horizon Hudson Pacific Properties is expected to under-perform the Brandywine Realty. In addition to that, Hudson Pacific is 1.55 times more volatile than Brandywine Realty Trust. It trades about -0.08 of its total potential returns per unit of risk. Brandywine Realty Trust is currently generating about 0.09 per unit of volatility. If you would invest 391.00 in Brandywine Realty Trust on August 27, 2024 and sell it today you would earn a total of 164.00 from holding Brandywine Realty Trust or generate 41.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Pacific Properties vs. Brandywine Realty Trust
Performance |
| Timeline |
| Hudson Pacific Properties |
| Brandywine Realty Trust |
Hudson Pacific and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Pacific and Brandywine Realty
The main advantage of trading using opposite Hudson Pacific and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Pacific 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.| Hudson Pacific vs. Kilroy Realty Corp | Hudson Pacific vs. Highwoods Properties | Hudson Pacific vs. Cousins Properties Incorporated | Hudson Pacific vs. Piedmont Office Realty |
| Brandywine Realty vs. Douglas Emmett | Brandywine Realty vs. Kilroy Realty Corp | Brandywine Realty vs. Piedmont Office Realty | Brandywine Realty vs. City Office |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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