Correlation Between National Retail and Brixmor Property

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

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

Diversification Opportunities for National Retail and Brixmor Property

0.17

Correlation Coefficient

National Retail  Brixmor Property

Average diversification

The 3 months correlation between National and Brixmor is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and Brixmor Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixmor Property and National Retail 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 National Retail Properties 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 National Retail i.e., National Retail and Brixmor Property go up and down completely randomly.

Pair Corralation between National Retail and Brixmor Property

Considering the 90-day investment horizon National Retail Properties is expected to generate 0.99 times more return on investment than Brixmor Property. However, National Retail Properties is 1.01 times less risky than Brixmor Property. It trades about 0.07 of its potential returns per unit of risk. Brixmor Property is currently generating about -0.04 per unit of risk. If you would invest  3,978  in National Retail Properties on December 29, 2024 and sell it today you would earn a total of  231.00  from holding National Retail Properties or generate 5.81% return on investment over 90 days.

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

National Retail Properties  vs.  Brixmor Property

National Retail Prop

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Retail Properties are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, National Retail 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 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Brixmor Property is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with National Retail and Brixmor Property

The main advantage of trading using opposite National Retail and Brixmor Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail 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 National Retail Properties and Brixmor Property 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.