Correlation Between EastGroup Properties and Brandywine Realty

Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and Brandywine Realty 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 EastGroup Properties and Brandywine Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EastGroup Properties and Brandywine Realty Trust, you can compare the effects of market volatilities on EastGroup Properties and Brandywine Realty 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 EastGroup Properties with a short position of Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and Brandywine Realty.

Diversification Opportunities for EastGroup Properties and Brandywine Realty

0.6

Correlation Coefficient

EastGroup Properties  Brandywine Realty

Poor diversification

The 3 months correlation between EastGroup and Brandywine is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Brandywine Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandywine Realty Trust and EastGroup Properties 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 EastGroup Properties are associated (or correlated) with Brandywine Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandywine Realty Trust has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Brandywine Realty go up and down completely randomly.

Pair Corralation between EastGroup Properties and Brandywine Realty

Considering the 90-day investment horizon EastGroup Properties is expected to under-perform the Brandywine Realty. But the stock apears to be less risky and, when comparing its historical volatility, EastGroup Properties is 1.48 times less risky than Brandywine Realty. The stock trades about -0.01 of its potential returns per unit of risk. The Brandywine Realty Trust is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  398.00  in Brandywine Realty Trust on May 8, 2025 and sell it today you would lose (4.00) from holding Brandywine Realty Trust or give up 1.01% of portfolio value over 90 days.

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

EastGroup Properties  vs.  Brandywine Realty Trust

EastGroup Properties

Risk-Adjusted Performance

Weakest

Over the last 90 days EastGroup Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, EastGroup Properties is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Brandywine Realty Trust

Risk-Adjusted Performance

Weakest

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 latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with EastGroup Properties and Brandywine Realty

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

The idea behind EastGroup Properties and Brandywine Realty Trust 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.