Correlation Between Klépierre and Brixmor Property

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

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

Diversification Opportunities for Klépierre and Brixmor Property

-0.53

Correlation Coefficient

Klépierre  Brixmor Property

Excellent diversification

The 3 months correlation between Klépierre and Brixmor is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Klpierre SA and Brixmor Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixmor Property and Klépierre 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 Klpierre SA 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 Klépierre i.e., Klépierre and Brixmor Property go up and down completely randomly.

Pair Corralation between Klépierre and Brixmor Property

Assuming the 90 days horizon Klpierre SA is expected to under-perform the Brixmor Property. But the stock apears to be less risky and, when comparing its historical volatility, Klpierre SA is 1.46 times less risky than Brixmor Property. The stock trades about -0.07 of its potential returns per unit of risk. The Brixmor Property Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,433  in Brixmor Property Group on October 6, 2024 and sell it today you would earn a total of  227.00  from holding Brixmor Property Group or generate 9.33% return on investment over 90 days.

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

Klpierre SA  vs.  Brixmor Property Group

Klpierre SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Brixmor Property

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Brixmor Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Brixmor Property may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Klépierre and Brixmor Property

The main advantage of trading using opposite Klépierre and Brixmor Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klépierre 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 Klpierre SA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.