Correlation Between Brandywine Realty and HUBBELL

Can any of the company-specific risk be diversified away by investing in both Brandywine Realty and HUBBELL 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 HUBBELL 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 HUBBELL INC 35, you can compare the effects of market volatilities on Brandywine Realty and HUBBELL 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 HUBBELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandywine Realty and HUBBELL.

Diversification Opportunities for Brandywine Realty and HUBBELL

0.14

Correlation Coefficient

Brandywine Realty  HUBBELL

Average diversification

The 3 months correlation between Brandywine and HUBBELL is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and HUBBELL INC 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUBBELL INC 35 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 HUBBELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUBBELL INC 35 has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and HUBBELL go up and down completely randomly.

Pair Corralation between Brandywine Realty and HUBBELL

Considering the 90-day investment horizon Brandywine Realty is expected to generate 148.79 times less return on investment than HUBBELL. But when comparing it to its historical volatility, Brandywine Realty Trust is 33.15 times less risky than HUBBELL. It trades about 0.02 of its potential returns per unit of risk. HUBBELL INC 35 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9,530  in HUBBELL INC 35 on October 11, 2024 and sell it today you would earn a total of  51.00  from holding HUBBELL INC 35 or generate 0.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	70.16%
Values	Daily Returns

Brandywine Realty Trust  vs.  HUBBELL INC 35

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 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.

HUBBELL INC 35

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUBBELL INC 35 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUBBELL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brandywine Realty and HUBBELL

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

The idea behind Brandywine Realty Trust and HUBBELL INC 35 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 Global Correlations module to find global opportunities by holding instruments from different markets.