Correlation Between Wheeler Real and BRT Realty

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

Diversification Opportunities for Wheeler Real and BRT Realty

-0.67

Correlation Coefficient

Wheeler Real  BRT Realty

Excellent diversification

The 3 months correlation between Wheeler and BRT is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and BRT Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRT 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 BRT Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRT Realty Trust has no effect on the direction of Wheeler Real i.e., Wheeler Real and BRT Realty go up and down completely randomly.

Pair Corralation between Wheeler Real and BRT Realty

Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the BRT Realty. In addition to that, Wheeler Real is 3.8 times more volatile than BRT Realty Trust. It trades about -0.15 of its total potential returns per unit of risk. BRT Realty Trust is currently generating about 0.04 per unit of volatility. If you would invest  1,680  in BRT Realty Trust on February 27, 2024 and sell it today you would earn a total of  46.00  from holding BRT Realty Trust or generate 2.74% 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.  BRT Realty Trust

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 conflicting performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

BRT Realty Trust

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BRT Realty Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BRT Realty may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Wheeler Real and BRT Realty

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

The idea behind Wheeler Real Estate and BRT 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 CEOs Directory module to screen CEOs from public companies around the world.