Correlation Between Wheeler Real and Vanguard Reit

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

Diversification Opportunities for Wheeler Real and Vanguard Reit

-0.6

Correlation Coefficient

Wheeler Real  Vanguard Reit

Excellent diversification

The 3 months correlation between Wheeler and Vanguard is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and Vanguard Reit Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Reit Index 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 Vanguard Reit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Reit Index has no effect on the direction of Wheeler Real i.e., Wheeler Real and Vanguard Reit go up and down completely randomly.

Pair Corralation between Wheeler Real and Vanguard Reit

Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the Vanguard Reit. In addition to that, Wheeler Real is 9.76 times more volatile than Vanguard Reit Index. It trades about -0.4 of its total potential returns per unit of risk. Vanguard Reit Index is currently generating about 0.04 per unit of volatility. If you would invest  12,701  in Vanguard Reit Index on December 26, 2024 and sell it today you would earn a total of  289.00  from holding Vanguard Reit Index or generate 2.28% return on investment over 90 days.

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

Wheeler Real Estate  vs.  Vanguard Reit Index

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.

Vanguard Reit Index

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Reit Index are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Vanguard Reit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wheeler Real and Vanguard Reit

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

The idea behind Wheeler Real Estate and Vanguard Reit Index 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.