Correlation Between Innovative Industrial and Industrial Logistics
Can any of the company-specific risk be diversified away by investing in both Innovative Industrial and Industrial Logistics 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 Innovative Industrial and Industrial Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Industrial Properties and Industrial Logistics Properties, you can compare the effects of market volatilities on Innovative Industrial and Industrial Logistics 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 Innovative Industrial with a short position of Industrial Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Industrial and Industrial Logistics.
Diversification Opportunities for Innovative Industrial and Industrial Logistics
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innovative and Industrial is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Industrial Properti and Industrial Logistics Propertie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Logistics and Innovative Industrial 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 Innovative Industrial Properties are associated (or correlated) with Industrial Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Logistics has no effect on the direction of Innovative Industrial i.e., Innovative Industrial and Industrial Logistics go up and down completely randomly.
Pair Corralation between Innovative Industrial and Industrial Logistics
Given the investment horizon of 90 days Innovative Industrial is expected to generate 3.28 times less return on investment than Industrial Logistics. But when comparing it to its historical volatility, Innovative Industrial Properties is 1.89 times less risky than Industrial Logistics. It trades about 0.01 of its potential returns per unit of risk. Industrial Logistics Properties is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 368.00 in Industrial Logistics Properties on August 24, 2024 and sell it today you would earn a total of 2.00 from holding Industrial Logistics Properties or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Industrial Properti vs. Industrial Logistics Propertie
Performance |
| Timeline |
| Innovative Industrial |
| Industrial Logistics |
Innovative Industrial and Industrial Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Industrial and Industrial Logistics
The main advantage of trading using opposite Innovative Industrial and Industrial Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Industrial position performs unexpectedly, Industrial Logistics 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 Industrial Logistics will offset losses from the drop in Industrial Logistics' long position.| Innovative Industrial vs. Prologis | Innovative Industrial vs. Public Storage | Innovative Industrial vs. Extra Space Storage | Innovative Industrial vs. CubeSmart |
| Industrial Logistics vs. Terreno Realty | Industrial Logistics vs. LXP Industrial Trust | Industrial Logistics vs. Rexford Industrial Realty | Industrial Logistics vs. First Industrial 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |