Correlation Between RCI Hospitality and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality 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 RCI Hospitality and Brandywine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCI Hospitality Holdings and Brandywine Realty Trust, you can compare the effects of market volatilities on RCI Hospitality 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 RCI Hospitality with a short position of Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Brandywine Realty.
Diversification Opportunities for RCI Hospitality and Brandywine Realty
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RCI and Brandywine is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings 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 RCI Hospitality 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 RCI Hospitality Holdings 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 RCI Hospitality i.e., RCI Hospitality and Brandywine Realty go up and down completely randomly.
Pair Corralation between RCI Hospitality and Brandywine Realty
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 1.51 times more return on investment than Brandywine Realty. However, RCI Hospitality is 1.51 times more volatile than Brandywine Realty Trust. It trades about 0.34 of its potential returns per unit of risk. Brandywine Realty Trust is currently generating about 0.27 per unit of risk. If you would invest 4,342 in RCI Hospitality Holdings on September 1, 2024 and sell it today you would earn a total of 904.00 from holding RCI Hospitality Holdings or generate 20.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Brandywine Realty Trust
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Brandywine Realty Trust |
RCI Hospitality and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Brandywine Realty
The main advantage of trading using opposite RCI Hospitality and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality 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.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Brandywine Realty vs. Douglas Emmett | Brandywine Realty vs. Alexandria Real Estate | Brandywine Realty vs. Vornado Realty Trust | Brandywine Realty vs. Highwoods Properties |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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