Correlation Between Wheeler Real and Empire State

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

Diversification Opportunities for Wheeler Real and Empire State

-0.19

Correlation Coefficient

Wheeler Real  Empire State

Good diversification

The 3 months correlation between Wheeler and Empire is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate and Empire State Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire State Realty 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 Empire State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire State Realty has no effect on the direction of Wheeler Real i.e., Wheeler Real and Empire State go up and down completely randomly.

Pair Corralation between Wheeler Real and Empire State

Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the Empire State. In addition to that, Wheeler Real is 6.72 times more volatile than Empire State Realty. It trades about -0.01 of its total potential returns per unit of risk. Empire State Realty is currently generating about 0.07 per unit of volatility. If you would invest  675.00  in Empire State Realty on May 6, 2025 and sell it today you would earn a total of  60.00  from holding Empire State Realty or generate 8.89% 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.  Empire State Realty

Wheeler Real Estate

Risk-Adjusted Performance

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 latest weak performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Empire State Realty

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Empire State Realty are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Empire State may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Wheeler Real and Empire State

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

The idea behind Wheeler Real Estate and Empire State Realty 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.