Correlation Between Retail Opportunity and Wheeler Real

Can any of the company-specific risk be diversified away by investing in both Retail Opportunity 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 Retail Opportunity and Wheeler Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Retail Opportunity Investments and Wheeler Real Estate, you can compare the effects of market volatilities on Retail Opportunity 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 Retail Opportunity with a short position of Wheeler Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and Wheeler Real.

Diversification Opportunities for Retail Opportunity and Wheeler Real

-0.76

Correlation Coefficient

Retail Opportunity  Wheeler Real

Pay attention - limited upside

The 3 months correlation between Retail and Wheeler is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments 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 Retail Opportunity 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 Retail Opportunity Investments 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 Retail Opportunity i.e., Retail Opportunity and Wheeler Real go up and down completely randomly.

Pair Corralation between Retail Opportunity and Wheeler Real

Given the investment horizon of 90 days Retail Opportunity Investments is expected to generate 0.09 times more return on investment than Wheeler Real. However, Retail Opportunity Investments is 10.96 times less risky than Wheeler Real. It trades about 0.03 of its potential returns per unit of risk. Wheeler Real Estate is currently generating about -0.02 per unit of risk. If you would invest  1,391  in Retail Opportunity Investments on September 20, 2024 and sell it today you would earn a total of  352.50  from holding Retail Opportunity Investments or generate 25.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Retail Opportunity Investments  vs.  Wheeler Real Estate

Retail Opportunity

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Retail Opportunity Investments are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, Retail Opportunity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wheeler Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wheeler Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Retail Opportunity and Wheeler Real

The main advantage of trading using opposite Retail Opportunity and Wheeler Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Opportunity 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.

The idea behind Retail Opportunity Investments and Wheeler Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Valuation module to check real value of public entities based on technical and fundamental data.