Correlation Between Wheeler Real and Seritage Growth

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

Diversification Opportunities for Wheeler Real and Seritage Growth

-0.39

Correlation Coefficient

Wheeler Real  Seritage Growth

Very good diversification

The 3 months correlation between Wheeler and Seritage is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and Seritage Growth Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seritage Growth Prop 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 Seritage Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seritage Growth Prop has no effect on the direction of Wheeler Real i.e., Wheeler Real and Seritage Growth go up and down completely randomly.

Pair Corralation between Wheeler Real and Seritage Growth

Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the Seritage Growth. In addition to that, Wheeler Real is 17.67 times more volatile than Seritage Growth Properties. It trades about -0.02 of its total potential returns per unit of risk. Seritage Growth Properties is currently generating about 0.03 per unit of volatility. If you would invest  2,044  in Seritage Growth Properties on September 14, 2024 and sell it today you would earn a total of  256.00  from holding Seritage Growth Properties or generate 12.52% return on investment over 90 days.

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

Wheeler Real Estate  vs.  Seritage Growth Properties

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 January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Seritage Growth Prop

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Seritage Growth Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile technical and fundamental indicators, Seritage Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Wheeler Real and Seritage Growth

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

The idea behind Wheeler Real Estate and Seritage Growth Properties 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.