Correlation Between Brandywine Realty and Galaxy Payroll

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

Diversification Opportunities for Brandywine Realty and Galaxy Payroll

0.21

Correlation Coefficient

Brandywine Realty  Galaxy Payroll

Modest diversification

The 3 months correlation between Brandywine and Galaxy is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Galaxy Payroll Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Payroll Group 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 Galaxy Payroll. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Payroll Group has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Galaxy Payroll go up and down completely randomly.

Pair Corralation between Brandywine Realty and Galaxy Payroll

Considering the 90-day investment horizon Brandywine Realty Trust is expected to under-perform the Galaxy Payroll. But the stock apears to be less risky and, when comparing its historical volatility, Brandywine Realty Trust is 2.97 times less risky than Galaxy Payroll. The stock trades about -0.08 of its potential returns per unit of risk. The Galaxy Payroll Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  102.00  in Galaxy Payroll Group on December 3, 2024 and sell it today you would lose (12.00) from holding Galaxy Payroll Group or give up 11.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Brandywine Realty Trust  vs.  Galaxy Payroll Group

Brandywine Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brandywine Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Brandywine Realty is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Galaxy Payroll Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Galaxy Payroll Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Galaxy Payroll 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 Galaxy Payroll

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

The idea behind Brandywine Realty Trust and Galaxy Payroll Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.