Correlation Between Federal Realty and Wheeler Real
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Wheeler Real 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 Federal Realty and Wheeler Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Realty Investment and Wheeler Real Estate, you can compare the effects of market volatilities on Federal Realty and Wheeler Real 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 Federal Realty with a short position of Wheeler Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Wheeler Real.
Diversification Opportunities for Federal Realty and Wheeler Real
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federal and Wheeler is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Wheeler Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheeler Real Estate and Federal 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 Federal Realty Investment are associated (or correlated) with Wheeler Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheeler Real Estate has no effect on the direction of Federal Realty i.e., Federal Realty and Wheeler Real go up and down completely randomly.
Pair Corralation between Federal Realty and Wheeler Real
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 0.24 times more return on investment than Wheeler Real. However, Federal Realty Investment is 4.1 times less risky than Wheeler Real. It trades about -0.27 of its potential returns per unit of risk. Wheeler Real Estate is currently generating about -0.07 per unit of risk. If you would invest 2,262 in Federal Realty Investment on August 31, 2024 and sell it today you would lose (94.00) from holding Federal Realty Investment or give up 4.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Realty Investment vs. Wheeler Real Estate
Performance |
| Timeline |
| Federal Realty Investment |
| Wheeler Real Estate |
Federal Realty and Wheeler Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Wheeler Real
The main advantage of trading using opposite Federal Realty and Wheeler Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Wheeler Real 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 Wheeler Real will offset losses from the drop in Wheeler Real's long position.| Federal Realty vs. Site Centers Corp | Federal Realty vs. Urban Edge Properties | Federal Realty vs. Retail Opportunity Investments | Federal Realty vs. Brixmor Property |
| Wheeler Real vs. Cedar Realty Trust | Wheeler Real vs. CBL Associates Properties | Wheeler Real vs. Saul Centers | Wheeler Real vs. Wheeler Real Estate |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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