Correlation Between Wheeler Real and Clipper Realty

Can any of the company-specific risk be diversified away by investing in both Wheeler Real and Clipper Realty 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 Clipper Realty 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 Clipper Realty, you can compare the effects of market volatilities on Wheeler Real and Clipper Realty 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 Clipper Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheeler Real and Clipper Realty.

Diversification Opportunities for Wheeler Real and Clipper Realty

0.5

Correlation Coefficient

Wheeler Real  Clipper Realty

Very weak diversification

The 3 months correlation between Wheeler and Clipper is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and Clipper Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Realty 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 Clipper Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Realty has no effect on the direction of Wheeler Real i.e., Wheeler Real and Clipper Realty go up and down completely randomly.

Pair Corralation between Wheeler Real and Clipper Realty

Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the Clipper Realty. In addition to that, Wheeler Real is 2.54 times more volatile than Clipper Realty. It trades about -0.37 of its total potential returns per unit of risk. Clipper Realty is currently generating about -0.11 per unit of volatility. If you would invest  513.00  in Clipper Realty on December 21, 2024 and sell it today you would lose (143.00) from holding Clipper Realty or give up 27.88% of portfolio value over 90 days.

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

Wheeler Real Estate  vs.  Clipper Realty

Wheeler Real Estate

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Clipper Realty

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Wheeler Real and Clipper Realty

The main advantage of trading using opposite Wheeler Real and Clipper Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheeler Real position performs unexpectedly, Clipper Realty 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 Clipper Realty will offset losses from the drop in Clipper Realty's long position.

The idea behind Wheeler Real Estate and Clipper Realty 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.