Correlation Between Whitestone REIT and Site Centers

Can any of the company-specific risk be diversified away by investing in both Whitestone REIT and Site Centers 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 Whitestone REIT and Site Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Whitestone REIT and Site Centers Corp, you can compare the effects of market volatilities on Whitestone REIT and Site Centers 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 Whitestone REIT with a short position of Site Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitestone REIT and Site Centers.

Diversification Opportunities for Whitestone REIT and Site Centers

0.34

Correlation Coefficient

Whitestone REIT  Site Centers

Weak diversification

The 3 months correlation between Whitestone and Site is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Whitestone REIT and Site Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Site Centers Corp and Whitestone REIT 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 Whitestone REIT are associated (or correlated) with Site Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Site Centers Corp has no effect on the direction of Whitestone REIT i.e., Whitestone REIT and Site Centers go up and down completely randomly.

Pair Corralation between Whitestone REIT and Site Centers

Considering the 90-day investment horizon Whitestone REIT is expected to generate 5.12 times less return on investment than Site Centers. But when comparing it to its historical volatility, Whitestone REIT is 3.8 times less risky than Site Centers. It trades about 0.08 of its potential returns per unit of risk. Site Centers Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,155  in Site Centers Corp on September 22, 2024 and sell it today you would earn a total of  391.00  from holding Site Centers Corp or generate 33.85% return on investment over 90 days.

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

Whitestone REIT  vs.  Site Centers Corp

Whitestone REIT

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Whitestone REIT are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Whitestone REIT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Site Centers Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Site Centers Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Site Centers exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Whitestone REIT and Site Centers

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

The idea behind Whitestone REIT and Site Centers Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.