Correlation Between Brandywine Realty and Dave Busters

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

Diversification Opportunities for Brandywine Realty and Dave Busters

-0.08

Correlation Coefficient

Brandywine Realty  Dave Busters

Good diversification

The 3 months correlation between Brandywine and Dave is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Dave Busters Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Busters Enterta 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 Dave Busters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Busters Enterta has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Dave Busters go up and down completely randomly.

Pair Corralation between Brandywine Realty and Dave Busters

Considering the 90-day investment horizon Brandywine Realty Trust is expected to generate 0.35 times more return on investment than Dave Busters. However, Brandywine Realty Trust is 2.84 times less risky than Dave Busters. It trades about -0.04 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.12 per unit of risk. If you would invest  554.00  in Brandywine Realty Trust on September 22, 2024 and sell it today you would lose (15.00) from holding Brandywine Realty Trust or give up 2.71% 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.  Dave Busters Entertainment

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.

Dave Busters Enterta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dave Busters Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Brandywine Realty and Dave Busters

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

The idea behind Brandywine Realty Trust and Dave Busters Entertainment 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.