Correlation Between Brixmor Property and Agree Realty

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

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

Diversification Opportunities for Brixmor Property and Agree Realty

0.65

Correlation Coefficient

Brixmor Property  Agree Realty

Poor diversification

The 3 months correlation between Brixmor and Agree is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property and Agree Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agree Realty 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 are associated (or correlated) with Agree Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agree Realty has no effect on the direction of Brixmor Property i.e., Brixmor Property and Agree Realty go up and down completely randomly.

Pair Corralation between Brixmor Property and Agree Realty

Considering the 90-day investment horizon Brixmor Property is expected to generate 1.01 times more return on investment than Agree Realty. However, Brixmor Property is 1.01 times more volatile than Agree Realty. It trades about -0.02 of its potential returns per unit of risk. Agree Realty is currently generating about -0.08 per unit of risk. If you would invest  2,764  in Brixmor Property on September 22, 2024 and sell it today you would lose (55.00) from holding Brixmor Property or give up 1.99% of portfolio value over 90 days.

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

Brixmor Property  vs.  Agree Realty

Brixmor Property

Risk-Adjusted Performance

0 of 100

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.

Agree Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agree Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Agree Realty is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Brixmor Property and Agree Realty

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

The idea behind Brixmor Property and Agree Realty 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.