Correlation Between Prologis and LXP Industrial
Can any of the company-specific risk be diversified away by investing in both Prologis and LXP 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 Prologis and LXP Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prologis and LXP Industrial Trust, you can compare the effects of market volatilities on Prologis and LXP 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 Prologis with a short position of LXP Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prologis and LXP Industrial.
Diversification Opportunities for Prologis and LXP Industrial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prologis and LXP is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Prologis and LXP Industrial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LXP Industrial Trust and Prologis 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 Prologis are associated (or correlated) with LXP Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LXP Industrial Trust has no effect on the direction of Prologis i.e., Prologis and LXP Industrial go up and down completely randomly.
Pair Corralation between Prologis and LXP Industrial
Considering the 90-day investment horizon Prologis is expected to generate 1.07 times more return on investment than LXP Industrial. However, Prologis is 1.07 times more volatile than LXP Industrial Trust. It trades about 0.01 of its potential returns per unit of risk. LXP Industrial Trust is currently generating about 0.01 per unit of risk. If you would invest 11,448 in Prologis on September 2, 2024 and sell it today you would earn a total of 230.00 from holding Prologis or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prologis vs. LXP Industrial Trust
Performance |
| Timeline |
| Prologis |
| LXP Industrial Trust |
Prologis and LXP Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prologis and LXP Industrial
The main advantage of trading using opposite Prologis and LXP Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prologis position performs unexpectedly, LXP 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 LXP Industrial will offset losses from the drop in LXP Industrial's long position.| Prologis vs. Extra Space Storage | Prologis vs. CubeSmart | Prologis vs. STAG Industrial | Prologis vs. Innovative Industrial Properties |
| LXP Industrial vs. First Industrial Realty | LXP Industrial vs. Plymouth Industrial REIT | LXP Industrial vs. Global Self Storage | LXP 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |