Correlation Between Urban Edge and Rexford Industrial
Can any of the company-specific risk be diversified away by investing in both Urban Edge and Rexford 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 Urban Edge and Rexford Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Edge Properties and Rexford Industrial Realty, you can compare the effects of market volatilities on Urban Edge and Rexford 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 Urban Edge with a short position of Rexford Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and Rexford Industrial.
Diversification Opportunities for Urban Edge and Rexford Industrial
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Urban and Rexford is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and Rexford Industrial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rexford Industrial Realty and Urban Edge 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 Urban Edge Properties are associated (or correlated) with Rexford Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rexford Industrial Realty has no effect on the direction of Urban Edge i.e., Urban Edge and Rexford Industrial go up and down completely randomly.
Pair Corralation between Urban Edge and Rexford Industrial
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to generate 0.9 times more return on investment than Rexford Industrial. However, Urban Edge Properties is 1.11 times less risky than Rexford Industrial. It trades about 0.09 of its potential returns per unit of risk. Rexford Industrial Realty is currently generating about -0.03 per unit of risk. If you would invest 1,380 in Urban Edge Properties on August 27, 2024 and sell it today you would earn a total of 915.00 from holding Urban Edge Properties or generate 66.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Edge Properties vs. Rexford Industrial Realty
Performance |
| Timeline |
| Urban Edge Properties |
| Rexford Industrial Realty |
Urban Edge and Rexford Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and Rexford Industrial
The main advantage of trading using opposite Urban Edge and Rexford Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, Rexford 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 Rexford Industrial will offset losses from the drop in Rexford Industrial's long position.| Urban Edge vs. Saul Centers | Urban Edge vs. Site Centers Corp | Urban Edge vs. Kite Realty Group | Urban Edge vs. Retail Opportunity Investments |
| Rexford Industrial vs. Plymouth Industrial REIT | Rexford Industrial vs. EastGroup Properties | Rexford Industrial vs. LXP Industrial Trust | Rexford 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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