Correlation Between Wheeler Real and EPR Properties

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

Diversification Opportunities for Wheeler Real and EPR Properties

0.35

Correlation Coefficient

Wheeler Real  EPR Properties

Weak diversification

The 3 months correlation between Wheeler and EPR is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR 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 EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of Wheeler Real i.e., Wheeler Real and EPR Properties go up and down completely randomly.

Pair Corralation between Wheeler Real and EPR Properties

Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the EPR Properties. In addition to that, Wheeler Real is 5.22 times more volatile than EPR Properties. It trades about -0.23 of its total potential returns per unit of risk. EPR Properties is currently generating about -0.18 per unit of volatility. If you would invest  4,790  in EPR Properties on August 12, 2024 and sell it today you would lose (261.00) from holding EPR Properties or give up 5.45% of portfolio value over 90 days.

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

Wheeler Real Estate  vs.  EPR Properties

Wheeler Real Estate

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wheeler Real Estate are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain essential indicators, Wheeler Real reported solid returns over the last few months and may actually be approaching a breakup point.

EPR Properties

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EPR Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, EPR Properties may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Wheeler Real and EPR Properties

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

The idea behind Wheeler Real Estate and EPR 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.