Correlation Between Innovative Industrial and Rexford Industrial
Can any of the company-specific risk be diversified away by investing in both Innovative Industrial 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 Innovative Industrial and Rexford Industrial 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 Rexford Industrial Realty, you can compare the effects of market volatilities on Innovative Industrial 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 Innovative Industrial with a short position of Rexford Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Industrial and Rexford Industrial.
Diversification Opportunities for Innovative Industrial and Rexford Industrial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innovative and Rexford is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Industrial Properti 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 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 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 Innovative Industrial i.e., Innovative Industrial and Rexford Industrial go up and down completely randomly.
Pair Corralation between Innovative Industrial and Rexford Industrial
Given the investment horizon of 90 days Innovative Industrial Properties is expected to generate 1.64 times more return on investment than Rexford Industrial. However, Innovative Industrial is 1.64 times more volatile than Rexford Industrial Realty. It trades about 0.14 of its potential returns per unit of risk. Rexford Industrial Realty is currently generating about 0.17 per unit of risk. If you would invest 6,780 in Innovative Industrial Properties on November 2, 2024 and sell it today you would earn a total of 525.00 from holding Innovative Industrial Properties or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Industrial Properti vs. Rexford Industrial Realty
Performance |
| Timeline |
| Innovative Industrial |
| Rexford Industrial Realty |
Innovative Industrial and Rexford Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Industrial and Rexford Industrial
The main advantage of trading using opposite Innovative Industrial and Rexford Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Industrial 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.| Innovative Industrial vs. Prologis | Innovative Industrial vs. Public Storage | Innovative Industrial vs. Extra Space Storage | Innovative Industrial vs. CubeSmart |
| Rexford Industrial vs. Plymouth Industrial REIT | Rexford Industrial vs. EastGroup Properties | Rexford Industrial vs. LXP Industrial Trust | Rexford 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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