Correlation Between Terreno Realty and LXP Industrial
Can any of the company-specific risk be diversified away by investing in both Terreno Realty and LXP Industrial 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 LXP Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terreno Realty and LXP Industrial Trust, you can compare the effects of market volatilities on Terreno Realty and LXP Industrial 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 LXP Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terreno Realty and LXP Industrial.
Diversification Opportunities for Terreno Realty and LXP Industrial
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Terreno and LXP is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Realty and LXP Industrial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LXP Industrial Trust 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 LXP Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LXP Industrial Trust has no effect on the direction of Terreno Realty i.e., Terreno Realty and LXP Industrial go up and down completely randomly.
Pair Corralation between Terreno Realty and LXP Industrial
Given the investment horizon of 90 days Terreno Realty is expected to generate 1.11 times more return on investment than LXP Industrial. However, Terreno Realty is 1.11 times more volatile than LXP Industrial Trust. It trades about -0.01 of its potential returns per unit of risk. LXP Industrial Trust is currently generating about -0.11 per unit of risk. If you would invest 6,780 in Terreno Realty on November 2, 2024 and sell it today you would lose (217.00) from holding Terreno Realty or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terreno Realty vs. LXP Industrial Trust
Performance |
| Timeline |
| Terreno Realty |
| LXP Industrial Trust |
Terreno Realty and LXP Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terreno Realty and LXP Industrial
The main advantage of trading using opposite Terreno Realty and LXP Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terreno Realty position performs unexpectedly, LXP Industrial 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 LXP Industrial will offset losses from the drop in LXP Industrial'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 |
| LXP Industrial vs. First Industrial Realty | LXP Industrial vs. Plymouth Industrial REIT | LXP Industrial vs. Global Self Storage | LXP Industrial vs. Terreno 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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