Correlation Between Link Real and Brixmor Property

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

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

Diversification Opportunities for Link Real and Brixmor Property

-0.36

Correlation Coefficient

Link Real  Brixmor Property

Very good diversification

The 3 months correlation between Link and Brixmor is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Link Real Estate and Brixmor Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixmor Property and Link Real 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 Link Real Estate 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 Link Real i.e., Link Real and Brixmor Property go up and down completely randomly.

Pair Corralation between Link Real and Brixmor Property

Assuming the 90 days horizon Link Real Estate is expected to generate 1.05 times more return on investment than Brixmor Property. However, Link Real is 1.05 times more volatile than Brixmor Property Group. It trades about 0.1 of its potential returns per unit of risk. Brixmor Property Group is currently generating about -0.08 per unit of risk. If you would invest  400.00  in Link Real Estate on December 29, 2024 and sell it today you would earn a total of  36.00  from holding Link Real Estate or generate 9.0% return on investment over 90 days.

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

Link Real Estate  vs.  Brixmor Property Group

Link Real Estate

Risk-Adjusted Performance

OK

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

Brixmor Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brixmor Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Link Real and Brixmor Property

The main advantage of trading using opposite Link Real and Brixmor Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Link Real 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 Link Real Estate 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.