Correlation Between Brandywine Realty and Hawkins

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

Diversification Opportunities for Brandywine Realty and Hawkins

0.57

Correlation Coefficient

Brandywine Realty  Hawkins

Very weak diversification

The 3 months correlation between Brandywine and Hawkins is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Hawkins go up and down completely randomly.

Pair Corralation between Brandywine Realty and Hawkins

Considering the 90-day investment horizon Brandywine Realty Trust is expected to generate 1.06 times more return on investment than Hawkins. However, Brandywine Realty is 1.06 times more volatile than Hawkins. It trades about 0.08 of its potential returns per unit of risk. Hawkins is currently generating about 0.06 per unit of risk. If you would invest  524.00  in Brandywine Realty Trust on September 17, 2024 and sell it today you would earn a total of  60.00  from holding Brandywine Realty Trust or generate 11.45% return on investment over 90 days.

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

Brandywine Realty Trust  vs.  Hawkins

Brandywine Realty Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brandywine Realty Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Brandywine Realty displayed solid returns over the last few months and may actually be approaching a breakup point.

Hawkins

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward-looking signals, Hawkins may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Brandywine Realty and Hawkins

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

The idea behind Brandywine Realty Trust and Hawkins 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.