Correlation Between Brandywine Realty and Fonar

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

Diversification Opportunities for Brandywine Realty and Fonar

-0.67

Correlation Coefficient

Brandywine Realty  Fonar

Excellent diversification

The 3 months correlation between Brandywine and Fonar is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and Fonar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonar 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 Fonar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonar has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and Fonar go up and down completely randomly.

Pair Corralation between Brandywine Realty and Fonar

Considering the 90-day investment horizon Brandywine Realty Trust is expected to generate 1.15 times more return on investment than Fonar. However, Brandywine Realty is 1.15 times more volatile than Fonar. It trades about 0.23 of its potential returns per unit of risk. Fonar is currently generating about -0.16 per unit of risk. If you would invest  476.00  in Brandywine Realty Trust on July 25, 2024 and sell it today you would earn a total of  151.00  from holding Brandywine Realty Trust or generate 31.72% return on investment over 90 days.

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

Brandywine Realty Trust  vs.  Fonar

Brandywine Realty Trust

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brandywine Realty Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Brandywine Realty displayed solid returns over the last few months and may actually be approaching a breakup point.

Fonar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fonar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in November 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Brandywine Realty and Fonar

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

The idea behind Brandywine Realty Trust and Fonar 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.