Correlation Between Rithm Property and Whitestone REIT

Can any of the company-specific risk be diversified away by investing in both Rithm Property 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 Rithm Property and Whitestone REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rithm Property Trust and Whitestone REIT, you can compare the effects of market volatilities on Rithm Property 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 Rithm Property with a short position of Whitestone REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Property and Whitestone REIT.

Diversification Opportunities for Rithm Property and Whitestone REIT

0.02

Correlation Coefficient

Rithm Property  Whitestone REIT

Significant diversification

The 3 months correlation between Rithm and Whitestone is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Property Trust and Whitestone REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitestone REIT and Rithm Property 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 Rithm Property Trust 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 Rithm Property i.e., Rithm Property and Whitestone REIT go up and down completely randomly.

Pair Corralation between Rithm Property and Whitestone REIT

Considering the 90-day investment horizon Rithm Property Trust is expected to generate 1.92 times more return on investment than Whitestone REIT. However, Rithm Property is 1.92 times more volatile than Whitestone REIT. It trades about 0.03 of its potential returns per unit of risk. Whitestone REIT is currently generating about 0.03 per unit of risk. If you would invest  294.00  in Rithm Property Trust on December 20, 2024 and sell it today you would earn a total of  8.00  from holding Rithm Property Trust or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Rithm Property Trust  vs.  Whitestone REIT

Rithm Property Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rithm Property Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Rithm Property is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Whitestone REIT

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Whitestone REIT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Whitestone REIT is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Rithm Property and Whitestone REIT

The main advantage of trading using opposite Rithm Property and Whitestone REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Property 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.

The idea behind Rithm Property Trust and Whitestone REIT 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.