Correlation Between Whitestone REIT and Federal Realty

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

By analyzing existing cross correlation between Whitestone REIT and Federal Realty Investment, you can compare the effects of market volatilities on Whitestone REIT and Federal Realty 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 Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitestone REIT and Federal Realty.

Diversification Opportunities for Whitestone REIT and Federal Realty

0.48

Correlation Coefficient

Whitestone REIT  Federal Realty

Very weak diversification

The 3 months correlation between Whitestone and Federal is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Whitestone REIT and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment 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 Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Whitestone REIT i.e., Whitestone REIT and Federal Realty go up and down completely randomly.

Pair Corralation between Whitestone REIT and Federal Realty

Considering the 90-day investment horizon Whitestone REIT is expected to generate 1.04 times more return on investment than Federal Realty. However, Whitestone REIT is 1.04 times more volatile than Federal Realty Investment. It trades about -0.02 of its potential returns per unit of risk. Federal Realty Investment is currently generating about -0.03 per unit of risk. If you would invest  1,243  in Whitestone REIT on May 7, 2025 and sell it today you would lose (31.00) from holding Whitestone REIT or give up 2.49% of portfolio value over 90 days.

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

Whitestone REIT  vs.  Federal Realty Investment

Whitestone REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Whitestone REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Whitestone REIT is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Federal Realty Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Federal Realty Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Federal Realty is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Whitestone REIT and Federal Realty

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

The idea behind Whitestone REIT and Federal Realty Investment 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.