Correlation Between Rexford Industrial and Public Storage
Can any of the company-specific risk be diversified away by investing in both Rexford Industrial and Public 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 Public 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 Public Storage, you can compare the effects of market volatilities on Rexford Industrial and Public 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexford Industrial and Public Storage.
Diversification Opportunities for Rexford Industrial and Public Storage
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rexford and Public is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Rexford Industrial Realty and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Rexford Industrial i.e., Rexford Industrial and Public Storage go up and down completely randomly.
Pair Corralation between Rexford Industrial and Public Storage
Assuming the 90 days trading horizon Rexford Industrial Realty is expected to generate 1.14 times more return on investment than Public Storage. However, Rexford Industrial is 1.14 times more volatile than Public Storage. It trades about -0.17 of its potential returns per unit of risk. Public Storage is currently generating about -0.29 per unit of risk. If you would invest 2,338 in Rexford Industrial Realty on August 27, 2024 and sell it today you would lose (97.00) from holding Rexford Industrial Realty or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rexford Industrial Realty vs. Public Storage
Performance |
| Timeline |
| Rexford Industrial Realty |
| Public Storage |
Rexford Industrial and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rexford Industrial and Public Storage
The main advantage of trading using opposite Rexford Industrial and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexford Industrial position performs unexpectedly, Public 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 Public Storage will offset losses from the drop in Public Storage's long position.| Rexford Industrial vs. Public Storage | Rexford Industrial vs. Public Storage | Rexford Industrial vs. Public Storage | Rexford Industrial vs. Public Storage |
| Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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