Correlation Between Global Medical and Rexford Industrial
Can any of the company-specific risk be diversified away by investing in both Global Medical 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 Global Medical and Rexford Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Medical REIT and Rexford Industrial Realty, you can compare the effects of market volatilities on Global Medical 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 Global Medical with a short position of Rexford Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Medical and Rexford Industrial.
Diversification Opportunities for Global Medical and Rexford Industrial
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and Rexford is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Global Medical REIT 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 Global Medical 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 Global Medical REIT 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 Global Medical i.e., Global Medical and Rexford Industrial go up and down completely randomly.
Pair Corralation between Global Medical and Rexford Industrial
Assuming the 90 days trading horizon Global Medical is expected to generate 1.08 times less return on investment than Rexford Industrial. But when comparing it to its historical volatility, Global Medical REIT is 1.9 times less risky than Rexford Industrial. It trades about 0.05 of its potential returns per unit of risk. Rexford Industrial Realty is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,983 in Rexford Industrial Realty on August 31, 2024 and sell it today you would earn a total of 265.00 from holding Rexford Industrial Realty or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Global Medical REIT vs. Rexford Industrial Realty
Performance |
| Timeline |
| Global Medical REIT |
| Rexford Industrial Realty |
Global Medical and Rexford Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Medical and Rexford Industrial
The main advantage of trading using opposite Global Medical and Rexford Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Medical 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.| Global Medical vs. Global Medical REIT | Global Medical vs. Community Healthcare Trust | Global Medical vs. National Health Investors | Global Medical vs. Healthcare Realty Trust |
| Rexford Industrial vs. Rexford Industrial Realty | Rexford Industrial vs. National Storage Affiliates | Rexford Industrial vs. Public Storage | Rexford Industrial vs. Digital Realty Trust |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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