Correlation Between Rexford Industrial and Nexus Real
Can any of the company-specific risk be diversified away by investing in both Rexford Industrial and Nexus Real 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 Nexus Real 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 Nexus Real Estate, you can compare the effects of market volatilities on Rexford Industrial and Nexus Real 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 Nexus Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexford Industrial and Nexus Real.
Diversification Opportunities for Rexford Industrial and Nexus Real
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rexford and Nexus is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Rexford Industrial Realty and Nexus Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexus Real Estate 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 Nexus Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexus Real Estate has no effect on the direction of Rexford Industrial i.e., Rexford Industrial and Nexus Real go up and down completely randomly.
Pair Corralation between Rexford Industrial and Nexus Real
Given the investment horizon of 90 days Rexford Industrial Realty is expected to under-perform the Nexus Real. But the stock apears to be less risky and, when comparing its historical volatility, Rexford Industrial Realty is 1.32 times less risky than Nexus Real. The stock trades about -0.04 of its potential returns per unit of risk. The Nexus Real Estate is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 493.00 in Nexus Real Estate on August 29, 2024 and sell it today you would earn a total of 72.00 from holding Nexus Real Estate or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.03% |
| Values | Daily Returns |
Rexford Industrial Realty vs. Nexus Real Estate
Performance |
| Timeline |
| Rexford Industrial Realty |
| Nexus Real Estate |
Rexford Industrial and Nexus Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rexford Industrial and Nexus Real
The main advantage of trading using opposite Rexford Industrial and Nexus Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexford Industrial position performs unexpectedly, Nexus Real 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 Nexus Real will offset losses from the drop in Nexus Real's long position.| Rexford Industrial vs. Plymouth Industrial REIT | Rexford Industrial vs. EastGroup Properties | Rexford Industrial vs. LXP Industrial Trust | Rexford Industrial vs. Terreno Realty |
| Nexus Real vs. National Storage Affiliates | Nexus Real vs. CubeSmart | Nexus Real vs. Rexford Industrial Realty | Nexus Real vs. Plymouth Industrial REIT |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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