Correlation Between Big Yellow and LXP Industrial
Can any of the company-specific risk be diversified away by investing in both Big Yellow and LXP Industrial 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 Big Yellow and LXP Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Yellow Group and LXP Industrial Trust, you can compare the effects of market volatilities on Big Yellow and LXP Industrial 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 Big Yellow with a short position of LXP Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Yellow and LXP Industrial.
Diversification Opportunities for Big Yellow and LXP Industrial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Big and LXP is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Big Yellow Group and LXP Industrial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LXP Industrial Trust and Big Yellow 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 Big Yellow Group are associated (or correlated) with LXP Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LXP Industrial Trust has no effect on the direction of Big Yellow i.e., Big Yellow and LXP Industrial go up and down completely randomly.
Pair Corralation between Big Yellow and LXP Industrial
Assuming the 90 days horizon Big Yellow Group is expected to under-perform the LXP Industrial. In addition to that, Big Yellow is 1.59 times more volatile than LXP Industrial Trust. It trades about -0.24 of its total potential returns per unit of risk. LXP Industrial Trust is currently generating about -0.02 per unit of volatility. If you would invest 944.00 in LXP Industrial Trust on September 1, 2024 and sell it today you would lose (9.00) from holding LXP Industrial Trust or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Yellow Group vs. LXP Industrial Trust
Performance |
| Timeline |
| Big Yellow Group |
| LXP Industrial Trust |
Big Yellow and LXP Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Yellow and LXP Industrial
The main advantage of trading using opposite Big Yellow and LXP Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Yellow position performs unexpectedly, LXP Industrial 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 LXP Industrial will offset losses from the drop in LXP Industrial's long position.| Big Yellow vs. LXP Industrial Trust | Big Yellow vs. First Industrial Realty | Big Yellow vs. Plymouth Industrial REIT | Big Yellow vs. Terreno Realty |
| LXP Industrial vs. First Industrial Realty | LXP Industrial vs. Plymouth Industrial REIT | LXP Industrial vs. Global Self Storage | LXP Industrial vs. Terreno Realty |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |