Correlation Between Brixmor Property and Essex Property

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

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

Diversification Opportunities for Brixmor Property and Essex Property

0.14

Correlation Coefficient

Brixmor Property  Essex Property

Average diversification

The 3 months correlation between Brixmor and Essex is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property and Essex Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essex Property Trust 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 Essex Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essex Property Trust has no effect on the direction of Brixmor Property i.e., Brixmor Property and Essex Property go up and down completely randomly.

Pair Corralation between Brixmor Property and Essex Property

Considering the 90-day investment horizon Brixmor Property is expected to generate 0.89 times more return on investment than Essex Property. However, Brixmor Property is 1.12 times less risky than Essex Property. It trades about 0.07 of its potential returns per unit of risk. Essex Property Trust is currently generating about -0.08 per unit of risk. If you would invest  2,499  in Brixmor Property on May 7, 2025 and sell it today you would earn a total of  140.00  from holding Brixmor Property or generate 5.6% return on investment over 90 days.

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

Brixmor Property  vs.  Essex Property Trust

Brixmor Property

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Brixmor Property are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Brixmor Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Essex Property Trust

Risk-Adjusted Performance

Weakest

Over the last 90 days Essex Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Brixmor Property and Essex Property

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

The idea behind Brixmor Property and Essex Property Trust 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.