Correlation Between Brixmor Property and Netstreit Corp

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

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

Diversification Opportunities for Brixmor Property and Netstreit Corp

0.82

Correlation Coefficient

Brixmor Property  Netstreit Corp

Very poor diversification

The 3 months correlation between Brixmor and Netstreit is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property and Netstreit Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netstreit Corp and Brixmor Property 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 Brixmor Property are associated (or correlated) with Netstreit Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netstreit Corp has no effect on the direction of Brixmor Property i.e., Brixmor Property and Netstreit Corp go up and down completely randomly.

Pair Corralation between Brixmor Property and Netstreit Corp

Considering the 90-day investment horizon Brixmor Property is expected to generate 0.82 times more return on investment than Netstreit Corp. However, Brixmor Property is 1.21 times less risky than Netstreit Corp. It trades about -0.1 of its potential returns per unit of risk. Netstreit Corp is currently generating about -0.08 per unit of risk. If you would invest  2,976  in Brixmor Property on November 28, 2024 and sell it today you would lose (236.00) from holding Brixmor Property or give up 7.93% of portfolio value over 90 days.

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

Brixmor Property  vs.  Netstreit Corp

Brixmor Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brixmor Property has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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.

Netstreit Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Netstreit Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Brixmor Property and Netstreit Corp

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

The idea behind Brixmor Property and Netstreit Corp 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.