Correlation Between Brandywine Realty and Cannae Holdings

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

Diversification Opportunities for Brandywine Realty and Cannae Holdings

-0.03

Correlation Coefficient

Brandywine Realty  Cannae Holdings

Good diversification

The 3 months correlation between Brandywine and Cannae is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Cannae Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannae Holdings 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 Cannae Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannae Holdings has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Cannae Holdings go up and down completely randomly.

Pair Corralation between Brandywine Realty and Cannae Holdings

Considering the 90-day investment horizon Brandywine Realty Trust is expected to generate 1.87 times more return on investment than Cannae Holdings. However, Brandywine Realty is 1.87 times more volatile than Cannae Holdings. It trades about 0.05 of its potential returns per unit of risk. Cannae Holdings is currently generating about -0.05 per unit of risk. If you would invest  539.00  in Brandywine Realty Trust on September 21, 2024 and sell it today you would earn a total of  11.50  from holding Brandywine Realty Trust or generate 2.13% return on investment over 90 days.

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

Brandywine Realty Trust  vs.  Cannae Holdings

Brandywine Realty Trust

Risk-Adjusted Performance

4 of 100

Insignificant

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

Cannae Holdings

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cannae Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Cannae Holdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Brandywine Realty and Cannae Holdings

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

The idea behind Brandywine Realty Trust and Cannae Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.