Correlation Between Wheeler Real and CBL Associates

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

Diversification Opportunities for Wheeler Real and CBL Associates

0.49

Correlation Coefficient

Wheeler Real  CBL Associates

Very weak diversification

The 3 months correlation between Wheeler and CBL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and CBL Associates Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBL Associates Properties 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 CBL Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBL Associates Properties has no effect on the direction of Wheeler Real i.e., Wheeler Real and CBL Associates go up and down completely randomly.

Pair Corralation between Wheeler Real and CBL Associates

Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the CBL Associates. In addition to that, Wheeler Real is 5.43 times more volatile than CBL Associates Properties. It trades about -0.07 of its total potential returns per unit of risk. CBL Associates Properties is currently generating about -0.05 per unit of volatility. If you would invest  2,322  in CBL Associates Properties on February 20, 2024 and sell it today you would lose (102.00) from holding CBL Associates Properties or give up 4.39% 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.  CBL Associates 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 June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

CBL Associates Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBL Associates Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, CBL Associates is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Wheeler Real and CBL Associates

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

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