Correlation Between AGREE RLTY and Brixmor Property

Can any of the company-specific risk be diversified away by investing in both AGREE RLTY and Brixmor Property 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 AGREE RLTY and Brixmor Property into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AGREE RLTY P and Brixmor Property Group, you can compare the effects of market volatilities on AGREE RLTY and Brixmor Property 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 AGREE RLTY with a short position of Brixmor Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGREE RLTY and Brixmor Property.

Diversification Opportunities for AGREE RLTY and Brixmor Property

0.92

Correlation Coefficient

AGREE RLTY  Brixmor Property

Almost no diversification

The 3 months correlation between AGREE and Brixmor is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding AGREE RLTY P and Brixmor Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixmor Property and AGREE RLTY 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 AGREE RLTY P are associated (or correlated) with Brixmor Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brixmor Property has no effect on the direction of AGREE RLTY i.e., AGREE RLTY and Brixmor Property go up and down completely randomly.

Pair Corralation between AGREE RLTY and Brixmor Property

Assuming the 90 days horizon AGREE RLTY is expected to generate 1.25 times less return on investment than Brixmor Property. But when comparing it to its historical volatility, AGREE RLTY P is 1.03 times less risky than Brixmor Property. It trades about 0.39 of its potential returns per unit of risk. Brixmor Property Group is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest  2,520  in Brixmor Property Group on August 31, 2024 and sell it today you would earn a total of  320.00  from holding Brixmor Property Group or generate 12.7% return on investment over 90 days.

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

AGREE RLTY P  vs.  Brixmor Property Group

AGREE RLTY P

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGREE RLTY P are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AGREE RLTY reported solid returns over the last few months and may actually be approaching a breakup point.

Brixmor Property

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brixmor Property Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Brixmor Property reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGREE RLTY and Brixmor Property

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

The idea behind AGREE RLTY P and Brixmor Property Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.