Correlation Between Essential Properties and Brixmor Property

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

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

Diversification Opportunities for Essential Properties and Brixmor Property

-0.24

Correlation Coefficient

Essential Properties  Brixmor Property

Very good diversification

The 3 months correlation between Essential and Brixmor is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Essential Properties Realty and Brixmor Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixmor Property and Essential Properties 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 Essential Properties Realty 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 Essential Properties i.e., Essential Properties and Brixmor Property go up and down completely randomly.

Pair Corralation between Essential Properties and Brixmor Property

Given the investment horizon of 90 days Essential Properties Realty is expected to under-perform the Brixmor Property. But the stock apears to be less risky and, when comparing its historical volatility, Essential Properties Realty is 1.26 times less risky than Brixmor Property. The stock trades about -0.05 of its potential returns per unit of risk. The Brixmor Property is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,502  in Brixmor Property on May 5, 2025 and sell it today you would earn a total of  45.00  from holding Brixmor Property or generate 1.8% return on investment over 90 days.

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

Essential Properties Realty  vs.  Brixmor Property

Essential Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Essential Properties Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Essential Properties is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Brixmor Property

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brixmor Property are ranked lower than 2 (%) 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.

Pair Trading with Essential Properties and Brixmor Property

The main advantage of trading using opposite Essential Properties and Brixmor Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essential Properties 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 Essential Properties Realty 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.