Correlation Between Rexford Industrial and Big Yellow
Can any of the company-specific risk be diversified away by investing in both Rexford Industrial and Big Yellow 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 Rexford Industrial and Big Yellow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rexford Industrial Realty and Big Yellow Group, you can compare the effects of market volatilities on Rexford Industrial and Big Yellow 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 Rexford Industrial with a short position of Big Yellow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexford Industrial and Big Yellow.
Diversification Opportunities for Rexford Industrial and Big Yellow
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rexford and Big is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Rexford Industrial Realty and Big Yellow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Yellow Group and Rexford 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 Rexford Industrial Realty are associated (or correlated) with Big Yellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Yellow Group has no effect on the direction of Rexford Industrial i.e., Rexford Industrial and Big Yellow go up and down completely randomly.
Pair Corralation between Rexford Industrial and Big Yellow
Assuming the 90 days trading horizon Rexford Industrial Realty is expected to generate 0.31 times more return on investment than Big Yellow. However, Rexford Industrial Realty is 3.21 times less risky than Big Yellow. It trades about 0.05 of its potential returns per unit of risk. Big Yellow Group is currently generating about 0.02 per unit of risk. If you would invest 2,054 in Rexford Industrial Realty on September 12, 2024 and sell it today you would earn a total of 260.00 from holding Rexford Industrial Realty or generate 12.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.32% |
| Values | Daily Returns |
Rexford Industrial Realty vs. Big Yellow Group
Performance |
| Timeline |
| Rexford Industrial Realty |
| Big Yellow Group |
Rexford Industrial and Big Yellow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rexford Industrial and Big Yellow
The main advantage of trading using opposite Rexford Industrial and Big Yellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexford Industrial position performs unexpectedly, Big Yellow 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 Big Yellow will offset losses from the drop in Big Yellow's long position.| Rexford Industrial vs. Prologis | Rexford Industrial vs. LXP Industrial Trust | Rexford Industrial vs. Public Storage | Rexford Industrial vs. Rexford Industrial Realty |
| Big Yellow vs. Rexford Industrial Realty | Big Yellow vs. LXP Industrial Trust | Big Yellow vs. Public Storage | Big Yellow vs. Rexford 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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