Correlation Between Rexford Industrial and Terreno Realty
Can any of the company-specific risk be diversified away by investing in both Rexford Industrial and Terreno 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 Terreno 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 Terreno Realty, you can compare the effects of market volatilities on Rexford Industrial and Terreno 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 Terreno Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexford Industrial and Terreno Realty.
Diversification Opportunities for Rexford Industrial and Terreno Realty
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rexford and Terreno is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Rexford Industrial Realty and Terreno Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terreno Realty 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 Terreno Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terreno Realty has no effect on the direction of Rexford Industrial i.e., Rexford Industrial and Terreno Realty go up and down completely randomly.
Pair Corralation between Rexford Industrial and Terreno Realty
Assuming the 90 days trading horizon Rexford Industrial Realty is expected to generate 0.87 times more return on investment than Terreno Realty. However, Rexford Industrial Realty is 1.15 times less risky than Terreno Realty. It trades about 0.12 of its potential returns per unit of risk. Terreno Realty is currently generating about 0.08 per unit of risk. If you would invest 2,283 in Rexford Industrial Realty on November 28, 2024 and sell it today you would earn a total of 38.00 from holding Rexford Industrial Realty or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rexford Industrial Realty vs. Terreno Realty
Performance |
| Timeline |
| Rexford Industrial Realty |
| Terreno Realty |
Rexford Industrial and Terreno Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rexford Industrial and Terreno Realty
The main advantage of trading using opposite Rexford Industrial and Terreno Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexford Industrial position performs unexpectedly, Terreno 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 Terreno Realty will offset losses from the drop in Terreno 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 |
| Terreno Realty vs. Plymouth Industrial REIT | Terreno Realty vs. EastGroup Properties | Terreno Realty vs. LXP Industrial Trust | Terreno Realty vs. First 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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