Correlation Between Brandywine Realty and Dixons Carphone

Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and Dixons Carphone 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 Dixons Carphone 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 Dixons Carphone plc, you can compare the effects of market volatilities on Brandywine Realty and Dixons Carphone 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 Dixons Carphone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and Dixons Carphone.

Diversification Opportunities for Brandywine Realty and Dixons Carphone

0.16

Correlation Coefficient

Brandywine Realty  Dixons Carphone

Average diversification

The 3 months correlation between Brandywine and Dixons is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Dixons Carphone plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dixons Carphone plc 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 Dixons Carphone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dixons Carphone plc has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Dixons Carphone go up and down completely randomly.

Pair Corralation between Brandywine Realty and Dixons Carphone

If you would invest  118.00  in Dixons Carphone plc on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Dixons Carphone plc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Brandywine Realty Trust  vs.  Dixons Carphone plc

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 weak fundamental indicators, Brandywine Realty may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Dixons Carphone plc

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Dixons Carphone plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dixons Carphone is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Brandywine Realty and Dixons Carphone

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

The idea behind Brandywine Realty Trust and Dixons Carphone plc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.