Correlation Between Brandywine Realty and Ambari Brands

Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and Ambari Brands 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 Brandywine Realty and Ambari Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brandywine Realty Trust and Ambari Brands, you can compare the effects of market volatilities on Brandywine Realty and Ambari Brands 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 Brandywine Realty with a short position of Ambari Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and Ambari Brands.

Diversification Opportunities for Brandywine Realty and Ambari Brands

0.23

Correlation Coefficient

Brandywine Realty  Ambari Brands

Modest diversification

The 3 months correlation between Brandywine and Ambari is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Ambari Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambari Brands and Brandywine Realty 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 Brandywine Realty Trust are associated (or correlated) with Ambari Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambari Brands has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Ambari Brands go up and down completely randomly.

Pair Corralation between Brandywine Realty and Ambari Brands

If you would invest  504.00  in Brandywine Realty Trust on October 25, 2024 and sell it today you would earn a total of  32.00  from holding Brandywine Realty Trust or generate 6.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	3.33%
Values	Daily Returns

Brandywine Realty Trust  vs.  Ambari Brands

Brandywine Realty Trust

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brandywine Realty Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Brandywine Realty may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ambari Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ambari Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Ambari Brands is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Brandywine Realty and Ambari Brands

The main advantage of trading using opposite Brandywine Realty and Ambari Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandywine Realty position performs unexpectedly, Ambari Brands 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 Ambari Brands will offset losses from the drop in Ambari Brands' long position.

The idea behind Brandywine Realty Trust and Ambari Brands pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.