Correlation Between NYSE Composite and Rexford Industrial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Rexford Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Rexford Industrial Realty, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Rexford Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Rexford Industrial.
Diversification Opportunities for NYSE Composite and Rexford Industrial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Rexford is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Rexford Industrial go up and down completely randomly.
Pair Corralation between NYSE Composite and Rexford Industrial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.59 times more return on investment than Rexford Industrial. However, NYSE Composite is 1.69 times less risky than Rexford Industrial. It trades about 0.21 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 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 57,378 from holding NYSE Composite or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Rexford Industrial Realty
Performance |
| Timeline |
NYSE Composite and Rexford Industrial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Rexford Industrial Realty
Pair trading matchups for Rexford Industrial
Pair Trading with NYSE Composite and Rexford Industrial
The main advantage of trading using opposite NYSE Composite and Rexford Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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