Correlation Between Macerich and Whitestone REIT
Can any of the company-specific risk be diversified away by investing in both Macerich 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 Macerich and Whitestone REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macerich Company and Whitestone REIT, you can compare the effects of market volatilities on Macerich 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 Macerich with a short position of Whitestone REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macerich and Whitestone REIT.
Diversification Opportunities for Macerich and Whitestone REIT
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Macerich and Whitestone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Macerich Company and Whitestone REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitestone REIT and Macerich 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 Macerich Company 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 Macerich i.e., Macerich and Whitestone REIT go up and down completely randomly.
Pair Corralation between Macerich and Whitestone REIT
Considering the 90-day investment horizon Macerich Company is expected to generate 1.37 times more return on investment than Whitestone REIT. However, Macerich is 1.37 times more volatile than Whitestone REIT. It trades about 0.27 of its potential returns per unit of risk. Whitestone REIT is currently generating about 0.16 per unit of risk. If you would invest 1,794 in Macerich Company on August 26, 2024 and sell it today you would earn a total of 178.00 from holding Macerich Company or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macerich Company vs. Whitestone REIT
Performance |
| Timeline |
| Macerich |
| Whitestone REIT |
Macerich and Whitestone REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macerich and Whitestone REIT
The main advantage of trading using opposite Macerich and Whitestone REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macerich 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.| Macerich vs. Site Centers Corp | Macerich vs. Inventrust Properties Corp | Macerich vs. Retail Opportunity Investments | Macerich vs. Netstreit Corp |
| Whitestone REIT vs. Site Centers Corp | Whitestone REIT vs. Inventrust Properties Corp | Whitestone REIT vs. Retail Opportunity Investments | Whitestone REIT vs. Netstreit 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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