Correlation Between Wheeler Real and Vornado Realty

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

Diversification Opportunities for Wheeler Real and Vornado Realty

0.52

Correlation Coefficient

Wheeler Real  Vornado Realty

Very weak diversification

The 3 months correlation between Wheeler and Vornado is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and Vornado Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vornado Realty Trust 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 Vornado Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vornado Realty Trust has no effect on the direction of Wheeler Real i.e., Wheeler Real and Vornado Realty go up and down completely randomly.

Pair Corralation between Wheeler Real and Vornado Realty

Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the Vornado Realty. In addition to that, Wheeler Real is 4.21 times more volatile than Vornado Realty Trust. It trades about -0.4 of its total potential returns per unit of risk. Vornado Realty Trust is currently generating about -0.04 per unit of volatility. If you would invest  4,265  in Vornado Realty Trust on December 26, 2024 and sell it today you would lose (333.00) from holding Vornado Realty Trust or give up 7.81% 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.  Vornado Realty Trust

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.

Vornado Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vornado Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Wheeler Real and Vornado Realty

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

The idea behind Wheeler Real Estate and Vornado Realty Trust 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.