Correlation Between Public Storage and LXP Industrial
Can any of the company-specific risk be diversified away by investing in both Public Storage 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 Public Storage and LXP Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and LXP Industrial Trust, you can compare the effects of market volatilities on Public Storage 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 Public Storage with a short position of LXP Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and LXP Industrial.
Diversification Opportunities for Public Storage and LXP Industrial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Public and LXP is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage 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 Public Storage 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 Public Storage 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 Public Storage i.e., Public Storage and LXP Industrial go up and down completely randomly.
Pair Corralation between Public Storage and LXP Industrial
Assuming the 90 days trading horizon Public Storage is expected to generate 30.81 times less return on investment than LXP Industrial. But when comparing it to its historical volatility, Public Storage is 2.86 times less risky than LXP Industrial. It trades about 0.01 of its potential returns per unit of risk. LXP Industrial Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 822.00 in LXP Industrial Trust on September 1, 2024 and sell it today you would earn a total of 113.00 from holding LXP Industrial Trust or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. LXP Industrial Trust
Performance |
| Timeline |
| Public Storage |
| LXP Industrial Trust |
Public Storage and LXP Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and LXP Industrial
The main advantage of trading using opposite Public Storage and LXP Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage 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.| Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public Storage vs. Public Storage |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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