Correlation Between SL Green and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both SL Green 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 SL Green and Brandywine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SL Green Realty and Brandywine Realty Trust, you can compare the effects of market volatilities on SL Green 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 SL Green with a short position of Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Brandywine Realty.
Diversification Opportunities for SL Green and Brandywine Realty
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SLG and Brandywine is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty 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 SL Green 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 SL Green Realty 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 SL Green i.e., SL Green and Brandywine Realty go up and down completely randomly.
Pair Corralation between SL Green and Brandywine Realty
Considering the 90-day investment horizon SL Green Realty is expected to generate 0.88 times more return on investment than Brandywine Realty. However, SL Green Realty is 1.14 times less risky than Brandywine Realty. It trades about 0.13 of its potential returns per unit of risk. Brandywine Realty Trust is currently generating about 0.06 per unit of risk. If you would invest 7,534 in SL Green Realty on August 24, 2024 and sell it today you would earn a total of 381.00 from holding SL Green Realty or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SL Green Realty vs. Brandywine Realty Trust
Performance |
| Timeline |
| SL Green Realty |
| Brandywine Realty Trust |
SL Green and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Brandywine Realty
The main advantage of trading using opposite SL Green and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green 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.| SL Green vs. Douglas Emmett | SL Green vs. Piedmont Office Realty | SL Green vs. City Office | SL Green vs. Cousins Properties Incorporated |
| Brandywine Realty vs. Douglas Emmett | Brandywine Realty vs. Piedmont Office Realty | Brandywine Realty vs. City Office | Brandywine Realty vs. Cousins Properties Incorporated |
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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