Correlation Between Hersha Hospitality and Whitestone REIT
Can any of the company-specific risk be diversified away by investing in both Hersha Hospitality 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 Hersha Hospitality and Whitestone REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hersha Hospitality Trust and Whitestone REIT, you can compare the effects of market volatilities on Hersha Hospitality 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 Hersha Hospitality with a short position of Whitestone REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hersha Hospitality and Whitestone REIT.
Diversification Opportunities for Hersha Hospitality and Whitestone REIT
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hersha and Whitestone is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hersha Hospitality Trust and Whitestone REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitestone REIT and Hersha Hospitality 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 Hersha Hospitality Trust 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 Hersha Hospitality i.e., Hersha Hospitality and Whitestone REIT go up and down completely randomly.
Pair Corralation between Hersha Hospitality and Whitestone REIT
If you would invest 1,424 in Whitestone REIT on August 28, 2024 and sell it today you would earn a total of 60.00 from holding Whitestone REIT or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Hersha Hospitality Trust vs. Whitestone REIT
Performance |
| Timeline |
| Hersha Hospitality Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Whitestone REIT |
Hersha Hospitality and Whitestone REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hersha Hospitality and Whitestone REIT
The main advantage of trading using opposite Hersha Hospitality and Whitestone REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hersha Hospitality 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.| Hersha Hospitality vs. RLJ Lodging Trust | Hersha Hospitality vs. Sunstone Hotel Investors | Hersha Hospitality vs. Pebblebrook Hotel Trust | Hersha Hospitality vs. Summit Hotel Properties |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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