Correlation Between Rexford Industrial and National Storage
Can any of the company-specific risk be diversified away by investing in both Rexford Industrial and National Storage 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 National Storage 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 National Storage Affiliates, you can compare the effects of market volatilities on Rexford Industrial and National Storage 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 National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexford Industrial and National Storage.
Diversification Opportunities for Rexford Industrial and National Storage
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rexford and National is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Rexford Industrial Realty and National Storage Affiliates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage Aff 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 National Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storage Aff has no effect on the direction of Rexford Industrial i.e., Rexford Industrial and National Storage go up and down completely randomly.
Pair Corralation between Rexford Industrial and National Storage
Assuming the 90 days trading horizon Rexford Industrial Realty is expected to generate 0.52 times more return on investment than National Storage. However, Rexford Industrial Realty is 1.91 times less risky than National Storage. It trades about 0.03 of its potential returns per unit of risk. National Storage Affiliates is currently generating about 0.01 per unit of risk. If you would invest 1,880 in Rexford Industrial Realty on August 24, 2024 and sell it today you would earn a total of 361.00 from holding Rexford Industrial Realty or generate 19.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 16.57% |
| Values | Daily Returns |
Rexford Industrial Realty vs. National Storage Affiliates
Performance |
| Timeline |
| Rexford Industrial Realty |
| National Storage Aff |
Rexford Industrial and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rexford Industrial and National Storage
The main advantage of trading using opposite Rexford Industrial and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexford Industrial position performs unexpectedly, National Storage 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 National Storage will offset losses from the drop in National Storage's long position.| Rexford Industrial vs. Rexford Industrial Realty | Rexford Industrial vs. National Storage Affiliates | Rexford Industrial vs. Public Storage | Rexford Industrial vs. Digital Realty Trust |
| National Storage vs. National Storage Affiliates | National Storage vs. Innovative Industrial Properties | National Storage vs. Industrial Logistics Properties | National Storage vs. Public Storage |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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