Correlation Between Brixmor Property and Kimco Realty

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

Diversification Opportunities for Brixmor Property and Kimco Realty

0.68

Correlation Coefficient

Brixmor Property  Kimco Realty

Poor diversification

The 3 months correlation between Brixmor and Kimco is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Brixmor Property and Kimco Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimco 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 Kimco Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimco Realty has no effect on the direction of Brixmor Property i.e., Brixmor Property and Kimco Realty go up and down completely randomly.

Pair Corralation between Brixmor Property and Kimco Realty

Considering the 90-day investment horizon Brixmor Property is expected to generate 0.94 times more return on investment than Kimco Realty. However, Brixmor Property is 1.06 times less risky than Kimco Realty. It trades about -0.14 of its potential returns per unit of risk. Kimco Realty is currently generating about -0.22 per unit of risk. If you would invest  2,252  in Brixmor Property on January 20, 2024 and sell it today you would lose (121.00) from holding Brixmor Property or give up 5.37% 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.  Kimco 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.

Kimco Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kimco Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Brixmor Property and Kimco Realty

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

The idea behind Brixmor Property and Kimco 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.