Correlation Between PennantPark Investment and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment 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 PennantPark Investment and Brandywine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Brandywine Realty Trust, you can compare the effects of market volatilities on PennantPark Investment 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 PennantPark Investment with a short position of Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Brandywine Realty.
Diversification Opportunities for PennantPark Investment and Brandywine Realty
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Brandywine is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment i.e., PennantPark Investment and Brandywine Realty go up and down completely randomly.
Pair Corralation between PennantPark Investment and Brandywine Realty
Given the investment horizon of 90 days PennantPark Investment is expected to under-perform the Brandywine Realty. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Investment is 1.27 times less risky than Brandywine Realty. The stock trades about -0.03 of its potential returns per unit of risk. The Brandywine Realty Trust is currently generating about 0.27 of returns per unit of risk over similar time horizon. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Brandywine Realty Trust
Performance |
| Timeline |
| PennantPark Investment |
| Brandywine Realty Trust |
PennantPark Investment and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Brandywine Realty
The main advantage of trading using opposite PennantPark Investment and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment 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.| PennantPark Investment vs. Visa Class A | PennantPark Investment vs. Diamond Hill Investment | PennantPark Investment vs. Distoken Acquisition | PennantPark Investment vs. Associated Capital Group |
| Brandywine Realty vs. Douglas Emmett | Brandywine Realty vs. Vornado Realty Trust | Brandywine Realty vs. Highwoods Properties | Brandywine Realty vs. Piedmont Office Realty |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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