Correlation Between Agree Realty and Whitestone REIT
Can any of the company-specific risk be diversified away by investing in both Agree Realty and Whitestone REIT 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 Agree Realty and Whitestone REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Whitestone REIT, you can compare the effects of market volatilities on Agree Realty and Whitestone REIT 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 Agree Realty with a short position of Whitestone REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Whitestone REIT.
Diversification Opportunities for Agree Realty and Whitestone REIT
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agree and Whitestone is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Whitestone REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitestone REIT and Agree Realty 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 Agree Realty are associated (or correlated) with Whitestone REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitestone REIT has no effect on the direction of Agree Realty i.e., Agree Realty and Whitestone REIT go up and down completely randomly.
Pair Corralation between Agree Realty and Whitestone REIT
Considering the 90-day investment horizon Agree Realty is expected to generate 0.82 times more return on investment than Whitestone REIT. However, Agree Realty is 1.23 times less risky than Whitestone REIT. It trades about 0.26 of its potential returns per unit of risk. Whitestone REIT is currently generating about 0.21 per unit of risk. If you would invest 7,363 in Agree Realty on August 30, 2024 and sell it today you would earn a total of 402.00 from holding Agree Realty or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. Whitestone REIT
Performance |
| Timeline |
| Agree Realty |
| Whitestone REIT |
Agree Realty and Whitestone REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Whitestone REIT
The main advantage of trading using opposite Agree Realty and Whitestone REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Whitestone REIT 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 Whitestone REIT will offset losses from the drop in Whitestone REIT's long position.| Agree Realty vs. CBL Associates Properties | Agree Realty vs. Cedar Realty Trust | Agree Realty vs. Simon Property Group | Agree Realty vs. Realty Income |
| Whitestone REIT vs. Regency Centers | Whitestone REIT vs. Saul Centers | Whitestone REIT vs. Retail Opportunity Investments | Whitestone REIT vs. Site Centers Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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