Correlation Between Realty Income and Wheeler Real
Can any of the company-specific risk be diversified away by investing in both Realty Income 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 Realty Income and Wheeler Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realty Income and Wheeler Real Estate, you can compare the effects of market volatilities on Realty Income 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 Realty Income with a short position of Wheeler Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and Wheeler Real.
Diversification Opportunities for Realty Income and Wheeler Real
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Realty and Wheeler is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income 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 Realty Income 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 Realty Income 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 Realty Income i.e., Realty Income and Wheeler Real go up and down completely randomly.
Pair Corralation between Realty Income and Wheeler Real
Taking into account the 90-day investment horizon Realty Income is expected to generate 8.07 times less return on investment than Wheeler Real. But when comparing it to its historical volatility, Realty Income is 2.32 times less risky than Wheeler Real. It trades about 0.1 of its potential returns per unit of risk. Wheeler Real Estate is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Wheeler Real Estate on November 4, 2024 and sell it today you would earn a total of 600.00 from holding Wheeler Real Estate or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Realty Income vs. Wheeler Real Estate
Performance |
| Timeline |
| Realty Income |
| Wheeler Real Estate |
Realty Income and Wheeler Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realty Income and Wheeler Real
The main advantage of trading using opposite Realty Income and Wheeler Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income 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.| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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