Correlation Between Brixmor Property and Vastned Retail

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

By analyzing existing cross correlation between Brixmor Property Group and Vastned Retail NV, you can compare the effects of market volatilities on Brixmor Property and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brixmor Property and Vastned Retail.

Diversification Opportunities for Brixmor Property and Vastned Retail

0.0

Correlation Coefficient

Brixmor Property  Vastned Retail

Pay attention - limited upside

The 3 months correlation between Brixmor and Vastned is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property Group and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Group are associated (or correlated) with Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of Brixmor Property i.e., Brixmor Property and Vastned Retail go up and down completely randomly.

Pair Corralation between Brixmor Property and Vastned Retail

Assuming the 90 days horizon Brixmor Property Group is expected to under-perform the Vastned Retail. But the stock apears to be less risky and, when comparing its historical volatility, Brixmor Property Group is 1.2 times less risky than Vastned Retail. The stock trades about -0.38 of its potential returns per unit of risk. The Vastned Retail NV is currently generating about -0.31 of returns per unit of risk over similar time horizon. If you would invest  2,252  in Vastned Retail NV on September 29, 2024 and sell it today you would lose (147.00) from holding Vastned Retail NV or give up 6.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Brixmor Property Group  vs.  Vastned Retail NV

Brixmor Property

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brixmor Property Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Brixmor Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vastned Retail NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vastned Retail NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vastned Retail is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Brixmor Property and Vastned Retail

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

The idea behind Brixmor Property Group and Vastned Retail NV 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.