Correlation Between Brandywine Realty and Sphere Entertainment

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

Diversification Opportunities for Brandywine Realty and Sphere Entertainment

0.34

Correlation Coefficient

Brandywine Realty  Sphere Entertainment

Weak diversification

The 3 months correlation between Brandywine and Sphere is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment 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 Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Sphere Entertainment go up and down completely randomly.

Pair Corralation between Brandywine Realty and Sphere Entertainment

Considering the 90-day investment horizon Brandywine Realty Trust is expected to under-perform the Sphere Entertainment. In addition to that, Brandywine Realty is 1.0 times more volatile than Sphere Entertainment Co. It trades about -0.14 of its total potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.21 per unit of volatility. If you would invest  3,779  in Sphere Entertainment Co on October 12, 2024 and sell it today you would earn a total of  358.00  from holding Sphere Entertainment Co or generate 9.47% return on investment over 90 days.

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

Brandywine Realty Trust  vs.  Sphere Entertainment Co

Brandywine Realty Trust

Risk-Adjusted Performance

0 of 100

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 latest inconsistent performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Sphere Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sphere Entertainment Co has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Brandywine Realty and Sphere Entertainment

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

The idea behind Brandywine Realty Trust and Sphere Entertainment Co 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.