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
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Federal and Wheeler is 0.06. 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
Considering the 90-day investment horizon Federal Realty is expected to generate 108.45 times less return on investment than Wheeler Real. But when comparing it to its historical volatility, Federal Realty Investment is 48.44 times less risky than Wheeler Real. It trades about 0.05 of its potential returns per unit of risk. Wheeler Real Estate is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 678.00 in Wheeler Real Estate on September 2, 2024 and sell it today you would earn a total of 123.00 from holding Wheeler Real Estate or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| 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. Agree Realty | Federal Realty vs. Regency Centers | Federal Realty vs. Netstreit Corp | Federal Realty vs. Kimco Realty |
| Wheeler Real vs. Federal Realty Investment | Wheeler Real vs. National Retail Properties | Wheeler Real vs. Kimco Realty |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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