Correlation Between Wheeler Real and Paramount
Can any of the company-specific risk be diversified away by investing in both Wheeler Real and Paramount 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 Wheeler Real and Paramount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheeler Real Estate and Paramount Group, you can compare the effects of market volatilities on Wheeler Real and Paramount 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 Wheeler Real with a short position of Paramount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheeler Real and Paramount.
Diversification Opportunities for Wheeler Real and Paramount
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wheeler and Paramount is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and Paramount Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Group and Wheeler Real 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 Wheeler Real Estate are associated (or correlated) with Paramount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Group has no effect on the direction of Wheeler Real i.e., Wheeler Real and Paramount go up and down completely randomly.
Pair Corralation between Wheeler Real and Paramount
Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the Paramount. In addition to that, Wheeler Real is 5.04 times more volatile than Paramount Group. It trades about -0.23 of its total potential returns per unit of risk. Paramount Group is currently generating about -0.14 per unit of volatility. If you would invest 481.00 in Paramount Group on October 21, 2024 and sell it today you would lose (25.00) from holding Paramount Group or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheeler Real Estate vs. Paramount Group
Performance |
| Timeline |
| Wheeler Real Estate |
| Paramount Group |
Wheeler Real and Paramount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheeler Real and Paramount
The main advantage of trading using opposite Wheeler Real and Paramount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheeler Real position performs unexpectedly, Paramount 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 Paramount will offset losses from the drop in Paramount's long position.| Wheeler Real vs. CBL Associates Properties | Wheeler Real vs. Cedar Realty Trust | Wheeler Real vs. Macerich Company | Wheeler Real vs. Simon Property Group |
| Paramount vs. Highwoods Properties | Paramount vs. Piedmont Office Realty | Paramount vs. Douglas Emmett | Paramount vs. Kilroy Realty 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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