Correlation Between Terreno Realty and Big Yellow
Can any of the company-specific risk be diversified away by investing in both Terreno Realty and Big Yellow 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 Terreno Realty and Big Yellow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terreno Realty and Big Yellow Group, you can compare the effects of market volatilities on Terreno Realty and Big Yellow 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 Terreno Realty with a short position of Big Yellow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terreno Realty and Big Yellow.
Diversification Opportunities for Terreno Realty and Big Yellow
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Terreno and Big is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Realty and Big Yellow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Yellow Group and Terreno Realty 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 Terreno Realty are associated (or correlated) with Big Yellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Yellow Group has no effect on the direction of Terreno Realty i.e., Terreno Realty and Big Yellow go up and down completely randomly.
Pair Corralation between Terreno Realty and Big Yellow
Given the investment horizon of 90 days Terreno Realty is expected to generate 0.44 times more return on investment than Big Yellow. However, Terreno Realty is 2.26 times less risky than Big Yellow. It trades about 0.0 of its potential returns per unit of risk. Big Yellow Group is currently generating about -0.19 per unit of risk. If you would invest 6,067 in Terreno Realty on September 3, 2024 and sell it today you would lose (4.00) from holding Terreno Realty or give up 0.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terreno Realty vs. Big Yellow Group
Performance |
| Timeline |
| Terreno Realty |
| Big Yellow Group |
Terreno Realty and Big Yellow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terreno Realty and Big Yellow
The main advantage of trading using opposite Terreno Realty and Big Yellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terreno Realty position performs unexpectedly, Big Yellow 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 Big Yellow will offset losses from the drop in Big Yellow's long position.| Terreno Realty vs. Plymouth Industrial REIT | Terreno Realty vs. EastGroup Properties | Terreno Realty vs. LXP Industrial Trust | Terreno Realty vs. First Industrial Realty |
| Big Yellow vs. Terreno Realty | Big Yellow vs. LXP Industrial Trust | Big Yellow vs. Rexford Industrial Realty | Big Yellow 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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