Correlation Between Simon Property and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both Simon Property 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 Simon Property and Brandywine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simon Property Group and Brandywine Realty Trust, you can compare the effects of market volatilities on Simon Property 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 Simon Property with a short position of Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Brandywine Realty.
Diversification Opportunities for Simon Property and Brandywine Realty
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simon and Brandywine is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group 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 Simon Property 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 Simon Property Group 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 Simon Property i.e., Simon Property and Brandywine Realty go up and down completely randomly.
Pair Corralation between Simon Property and Brandywine Realty
Considering the 90-day investment horizon Simon Property is expected to generate 1.68 times less return on investment than Brandywine Realty. But when comparing it to its historical volatility, Simon Property Group is 2.88 times less risky than Brandywine Realty. It trades about 0.17 of its potential returns per unit of risk. Brandywine Realty Trust is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 519.00 in Brandywine Realty Trust on August 28, 2024 and sell it today you would earn a total of 57.00 from holding Brandywine Realty Trust or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Brandywine Realty Trust
Performance |
| Timeline |
| Simon Property Group |
| Brandywine Realty Trust |
Simon Property and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Brandywine Realty
The main advantage of trading using opposite Simon Property and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property 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.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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