Correlation Between Big Yellow and Rexford Industrial
Can any of the company-specific risk be diversified away by investing in both Big Yellow and Rexford 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 Rexford 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 Rexford Industrial Realty, you can compare the effects of market volatilities on Big Yellow and Rexford 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 Rexford Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Yellow and Rexford Industrial.
Diversification Opportunities for Big Yellow and Rexford Industrial
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Big and Rexford is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Big Yellow Group and Rexford Industrial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rexford Industrial Realty 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 Rexford Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rexford Industrial Realty has no effect on the direction of Big Yellow i.e., Big Yellow and Rexford Industrial go up and down completely randomly.
Pair Corralation between Big Yellow and Rexford Industrial
Assuming the 90 days horizon Big Yellow Group is expected to under-perform the Rexford Industrial. In addition to that, Big Yellow is 3.84 times more volatile than Rexford Industrial Realty. It trades about -0.14 of its total potential returns per unit of risk. Rexford Industrial Realty is currently generating about -0.1 per unit of volatility. If you would invest 2,310 in Rexford Industrial Realty on January 10, 2025 and sell it today you would lose (31.00) from holding Rexford Industrial Realty or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Big Yellow Group vs. Rexford Industrial Realty
Performance |
| Timeline |
| Big Yellow Group |
| Rexford Industrial Realty |
Big Yellow and Rexford Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Yellow and Rexford Industrial
The main advantage of trading using opposite Big Yellow and Rexford Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Yellow position performs unexpectedly, Rexford 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 Rexford Industrial will offset losses from the drop in Rexford Industrial's long position.| Big Yellow vs. Terreno Realty | Big Yellow vs. LXP Industrial Trust | Big Yellow vs. Rexford Industrial Realty | Big Yellow vs. First Industrial Realty |
| Rexford Industrial vs. Public Storage | Rexford Industrial vs. Public Storage | Rexford Industrial vs. Public Storage | Rexford Industrial vs. Public Storage |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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