Correlation Between Brixmor Property and Kite Realty

Can any of the company-specific risk be diversified away by investing in both Brixmor Property and Kite 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 Kite 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 Kite Realty Group, you can compare the effects of market volatilities on Brixmor Property and Kite 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 Kite Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brixmor Property and Kite Realty.

Diversification Opportunities for Brixmor Property and Kite Realty

0.95

Correlation Coefficient

Brixmor Property  Kite Realty

Almost no diversification

The 3 months correlation between Brixmor and Kite is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property and Kite Realty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kite Realty Group 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 Kite Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kite Realty Group has no effect on the direction of Brixmor Property i.e., Brixmor Property and Kite Realty go up and down completely randomly.

Pair Corralation between Brixmor Property and Kite Realty

Considering the 90-day investment horizon Brixmor Property is expected to generate 1.01 times more return on investment than Kite Realty. However, Brixmor Property is 1.01 times more volatile than Kite Realty Group. It trades about 0.23 of its potential returns per unit of risk. Kite Realty Group is currently generating about 0.22 per unit of risk. If you would invest  2,489  in Brixmor Property on August 12, 2024 and sell it today you would earn a total of  385.00  from holding Brixmor Property or generate 15.47% return on investment over 90 days.

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

Brixmor Property  vs.  Kite Realty Group

Brixmor Property

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brixmor Property are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Brixmor Property showed solid returns over the last few months and may actually be approaching a breakup point.

Kite Realty Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kite Realty Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Kite Realty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brixmor Property and Kite Realty

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

The idea behind Brixmor Property and Kite Realty 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.