Abstract

REITs (Real Estate Investment Trusts) have gained significant popularity among the financial investors in therecent years. The investors do not have access to any model that correlates Wilshire US REIT Index with DowJones Industrial Average and different interest rate swaps. The researcher has developed empirical correlationsbetween Wilshire US REIT Index and Dow Jones Average and swap rates of different durations. The nullhypothesis that no correlation exists between natural logarithms of Wilshire US REIT Index and naturallogarithms of Dow Jones Industrial Average Index has been tested. The researcher has also tested the nullhypotheses that no correlation exists between natural logarithms of Wilshire US REIT Index and interest rateswaps of different durations. The period used in this study is from March 10, 2005, to March 10, 2015. Thefindings from this study indicate that the null hypothesis that no correlation exists between natural logarithm ofUS REIT Index and Dow Jones Industrial Average Index can be rejected. Further, the null hypotheses that nocorrelation exists between natural logarithms of US REIT Index and 1-year, 2-year, 3-year and 30-year interestrate swaps can also be rejected.

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