Correlation Between Brandywine Realty and Worthington Steel

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

Diversification Opportunities for Brandywine Realty and Worthington Steel

-0.18

Correlation Coefficient

Brandywine Realty  Worthington Steel

Good diversification

The 3 months correlation between Brandywine and Worthington is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel 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 Worthington Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Steel has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Worthington Steel go up and down completely randomly.

Pair Corralation between Brandywine Realty and Worthington Steel

Considering the 90-day investment horizon Brandywine Realty Trust is expected to generate 0.58 times more return on investment than Worthington Steel. However, Brandywine Realty Trust is 1.72 times less risky than Worthington Steel. It trades about -0.1 of its potential returns per unit of risk. Worthington Steel is currently generating about -0.44 per unit of risk. If you would invest  543.00  in Brandywine Realty Trust on October 11, 2024 and sell it today you would lose (28.00) from holding Brandywine Realty Trust or give up 5.16% of portfolio value over 90 days.

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

Brandywine Realty Trust  vs.  Worthington Steel

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.

Worthington Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Worthington Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Brandywine Realty and Worthington Steel

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

The idea behind Brandywine Realty Trust and Worthington Steel 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.