Correlation Between Four Corners and Brixmor Property

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

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

Diversification Opportunities for Four Corners and Brixmor Property

0.94

Correlation Coefficient

Four Corners  Brixmor Property

Almost no diversification

The 3 months correlation between Four and Brixmor is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Four Corners Property and Brixmor Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixmor Property and Four Corners 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 Four Corners Property 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 Four Corners i.e., Four Corners and Brixmor Property go up and down completely randomly.

Pair Corralation between Four Corners and Brixmor Property

Given the investment horizon of 90 days Four Corners is expected to generate 1.55 times less return on investment than Brixmor Property. But when comparing it to its historical volatility, Four Corners Property is 1.19 times less risky than Brixmor Property. It trades about 0.06 of its potential returns per unit of risk. Brixmor Property is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,703  in Brixmor Property on June 23, 2024 and sell it today you would earn a total of  1,071  from holding Brixmor Property or generate 62.89% return on investment over 90 days.

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

Four Corners Property  vs.  Brixmor Property

Four Corners Property

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Four Corners Property are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Four Corners unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 conflicting basic indicators, Brixmor Property showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Four Corners and Brixmor Property

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

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.