Correlation Between GLADSTONE LAND and REXFORD INDREALTY
Can any of the company-specific risk be diversified away by investing in both GLADSTONE LAND and REXFORD INDREALTY 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 GLADSTONE LAND and REXFORD INDREALTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLADSTONE LAND L 001 and REXFORD INDREALTY DL 01, you can compare the effects of market volatilities on GLADSTONE LAND and REXFORD INDREALTY 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 GLADSTONE LAND with a short position of REXFORD INDREALTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLADSTONE LAND and REXFORD INDREALTY.
Diversification Opportunities for GLADSTONE LAND and REXFORD INDREALTY
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GLADSTONE and REXFORD is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GLADSTONE LAND L 001 and REXFORD INDREALTY DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REXFORD INDREALTY and GLADSTONE LAND 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 GLADSTONE LAND L 001 are associated (or correlated) with REXFORD INDREALTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REXFORD INDREALTY has no effect on the direction of GLADSTONE LAND i.e., GLADSTONE LAND and REXFORD INDREALTY go up and down completely randomly.
Pair Corralation between GLADSTONE LAND and REXFORD INDREALTY
Assuming the 90 days horizon GLADSTONE LAND L 001 is expected to under-perform the REXFORD INDREALTY. In addition to that, GLADSTONE LAND is 1.21 times more volatile than REXFORD INDREALTY DL 01. It trades about -0.16 of its total potential returns per unit of risk. REXFORD INDREALTY DL 01 is currently generating about -0.06 per unit of volatility. If you would invest 3,920 in REXFORD INDREALTY DL 01 on September 15, 2024 and sell it today you would lose (80.00) from holding REXFORD INDREALTY DL 01 or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLADSTONE LAND L 001 vs. REXFORD INDREALTY DL 01
Performance |
| Timeline |
| GLADSTONE LAND L |
| REXFORD INDREALTY |
GLADSTONE LAND and REXFORD INDREALTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLADSTONE LAND and REXFORD INDREALTY
The main advantage of trading using opposite GLADSTONE LAND and REXFORD INDREALTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLADSTONE LAND position performs unexpectedly, REXFORD INDREALTY 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 REXFORD INDREALTY will offset losses from the drop in REXFORD INDREALTY's long position.| GLADSTONE LAND vs. Extra Space Storage | GLADSTONE LAND vs. REXFORD INDREALTY DL 01 | GLADSTONE LAND vs. CubeSmart | GLADSTONE LAND vs. First Industrial Realty |
| REXFORD INDREALTY vs. Extra Space Storage | REXFORD INDREALTY vs. CubeSmart | REXFORD INDREALTY vs. First Industrial Realty | REXFORD INDREALTY vs. National Storage Affiliates |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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