Correlation Between NYSE Composite and Whitestone REIT
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Whitestone REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Whitestone REIT, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Whitestone REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Whitestone REIT.
Diversification Opportunities for NYSE Composite and Whitestone REIT
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Whitestone is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Whitestone REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitestone REIT and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Whitestone REIT go up and down completely randomly.
Pair Corralation between NYSE Composite and Whitestone REIT
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.52 times less return on investment than Whitestone REIT. But when comparing it to its historical volatility, NYSE Composite is 1.8 times less risky than Whitestone REIT. It trades about 0.29 of its potential returns per unit of risk. Whitestone REIT is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,401 in Whitestone REIT on August 31, 2024 and sell it today you would earn a total of 87.00 from holding Whitestone REIT or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Whitestone REIT
Performance |
| Timeline |
NYSE Composite and Whitestone REIT Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Whitestone REIT
Pair trading matchups for Whitestone REIT
Pair Trading with NYSE Composite and Whitestone REIT
The main advantage of trading using opposite NYSE Composite and Whitestone REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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