Correlation Between Rexford Industrial and Indus Realty
Can any of the company-specific risk be diversified away by investing in both Rexford Industrial and Indus Realty 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 Indus Realty 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 Indus Realty Trust, you can compare the effects of market volatilities on Rexford Industrial and Indus Realty 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 Indus Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexford Industrial and Indus Realty.
Diversification Opportunities for Rexford Industrial and Indus Realty
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Rexford and Indus is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Rexford Industrial Realty and Indus Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indus Realty Trust 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 Indus Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indus Realty Trust has no effect on the direction of Rexford Industrial i.e., Rexford Industrial and Indus Realty go up and down completely randomly.
Pair Corralation between Rexford Industrial and Indus Realty
Assuming the 90 days trading horizon Rexford Industrial Realty is expected to generate 20.58 times more return on investment than Indus Realty. However, Rexford Industrial is 20.58 times more volatile than Indus Realty Trust. It trades about 0.03 of its potential returns per unit of risk. Indus Realty Trust is currently generating about 0.68 per unit of risk. If you would invest 2,066 in Rexford Industrial Realty on September 2, 2024 and sell it today you would earn a total of 244.00 from holding Rexford Industrial Realty or generate 11.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 3.77% |
| Values | Daily Returns |
Rexford Industrial Realty vs. Indus Realty Trust
Performance |
| Timeline |
| Rexford Industrial Realty |
| Indus Realty Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rexford Industrial and Indus Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rexford Industrial and Indus Realty
The main advantage of trading using opposite Rexford Industrial and Indus Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexford Industrial position performs unexpectedly, Indus Realty 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 Indus Realty will offset losses from the drop in Indus Realty's long position.| Rexford Industrial vs. Prologis | Rexford Industrial vs. LXP Industrial Trust | Rexford Industrial vs. Public Storage | Rexford Industrial vs. Rexford Industrial Realty |
| Indus Realty vs. Plymouth Industrial REIT | Indus Realty vs. First Industrial Realty | Indus Realty vs. Terreno Realty | Indus Realty 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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