Correlation Between REXFORD INDREALTY and GLADSTONE LAND
Can any of the company-specific risk be diversified away by investing in both REXFORD INDREALTY and GLADSTONE LAND 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 REXFORD INDREALTY and GLADSTONE LAND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REXFORD INDREALTY DL 01 and GLADSTONE LAND L 001, you can compare the effects of market volatilities on REXFORD INDREALTY and GLADSTONE LAND 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 REXFORD INDREALTY with a short position of GLADSTONE LAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of REXFORD INDREALTY and GLADSTONE LAND.
Diversification Opportunities for REXFORD INDREALTY and GLADSTONE LAND
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between REXFORD and GLADSTONE is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding REXFORD INDREALTY DL 01 and GLADSTONE LAND L 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLADSTONE LAND L and REXFORD INDREALTY 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 REXFORD INDREALTY DL 01 are associated (or correlated) with GLADSTONE LAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLADSTONE LAND L has no effect on the direction of REXFORD INDREALTY i.e., REXFORD INDREALTY and GLADSTONE LAND go up and down completely randomly.
Pair Corralation between REXFORD INDREALTY and GLADSTONE LAND
Assuming the 90 days horizon REXFORD INDREALTY DL 01 is expected to generate 0.7 times more return on investment than GLADSTONE LAND. However, REXFORD INDREALTY DL 01 is 1.44 times less risky than GLADSTONE LAND. It trades about 0.27 of its potential returns per unit of risk. GLADSTONE LAND L 001 is currently generating about 0.03 per unit of risk. If you would invest 3,619 in REXFORD INDREALTY DL 01 on October 20, 2024 and sell it today you would earn a total of 241.00 from holding REXFORD INDREALTY DL 01 or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
REXFORD INDREALTY DL 01 vs. GLADSTONE LAND L 001
Performance |
| Timeline |
| REXFORD INDREALTY |
| GLADSTONE LAND L |
REXFORD INDREALTY and GLADSTONE LAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REXFORD INDREALTY and GLADSTONE LAND
The main advantage of trading using opposite REXFORD INDREALTY and GLADSTONE LAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REXFORD INDREALTY position performs unexpectedly, GLADSTONE LAND 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 GLADSTONE LAND will offset losses from the drop in GLADSTONE LAND's long position.| REXFORD INDREALTY vs. Mitsui Chemicals | REXFORD INDREALTY vs. SILICON LABORATOR | REXFORD INDREALTY vs. REVO INSURANCE SPA | REXFORD INDREALTY vs. SBI Insurance Group |
| GLADSTONE LAND vs. Indutrade AB | GLADSTONE LAND vs. CarsalesCom | GLADSTONE LAND vs. CEOTRONICS | GLADSTONE LAND vs. Canon Marketing Japan |
Check out your portfolio center.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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