Correlation Between Netstreit Corp and Brixmor Property

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

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

Diversification Opportunities for Netstreit Corp and Brixmor Property

-0.39

Correlation Coefficient

Netstreit Corp  Brixmor Property

Very good diversification

The 3 months correlation between Netstreit and Brixmor is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Netstreit Corp and Brixmor Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixmor Property and Netstreit Corp 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 Netstreit Corp 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 Netstreit Corp i.e., Netstreit Corp and Brixmor Property go up and down completely randomly.

Pair Corralation between Netstreit Corp and Brixmor Property

Given the investment horizon of 90 days Netstreit Corp is expected to generate 1.08 times more return on investment than Brixmor Property. However, Netstreit Corp is 1.08 times more volatile than Brixmor Property. It trades about 0.16 of its potential returns per unit of risk. Brixmor Property is currently generating about -0.04 per unit of risk. If you would invest  1,375  in Netstreit Corp on December 30, 2024 and sell it today you would earn a total of  209.00  from holding Netstreit Corp or generate 15.2% return on investment over 90 days.

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

Netstreit Corp  vs.  Brixmor Property

Netstreit Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Netstreit Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Netstreit Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 Netstreit Corp and Brixmor Property

The main advantage of trading using opposite Netstreit Corp and Brixmor Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netstreit Corp 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 Netstreit Corp 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.