Correlation Between Brandywine Realty and JC Penney

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

Diversification Opportunities for Brandywine Realty and JC Penney

0.0

Correlation Coefficient

Brandywine Realty  JC Penney

Pay attention - limited upside

The 3 months correlation between Brandywine and JCP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brandywine Realty Trust and J C Penney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J C Penney 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 JC Penney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J C Penney has no effect on the direction of Brandywine Realty i.e., Brandywine Realty and JC Penney go up and down completely randomly.

Pair Corralation between Brandywine Realty and JC Penney

If you would invest  446.00  in Brandywine Realty Trust on February 6, 2024 and sell it today you would earn a total of  23.00  from holding Brandywine Realty Trust or generate 5.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Brandywine Realty Trust  vs.  J C Penney

Brandywine Realty Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brandywine Realty Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Brandywine Realty displayed solid returns over the last few months and may actually be approaching a breakup point.

J C Penney

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Brandywine Realty and JC Penney

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

The idea behind Brandywine Realty Trust and J C Penney 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.