Correlation Between Rexford Industrial and BRT Realty
Can any of the company-specific risk be diversified away by investing in both Rexford Industrial and BRT Realty 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 BRT Realty 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 BRT Realty Trust, you can compare the effects of market volatilities on Rexford Industrial and BRT Realty 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 BRT Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexford Industrial and BRT Realty.
Diversification Opportunities for Rexford Industrial and BRT Realty
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rexford and BRT is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Rexford Industrial Realty and BRT Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRT Realty Trust 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 BRT Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRT Realty Trust has no effect on the direction of Rexford Industrial i.e., Rexford Industrial and BRT Realty go up and down completely randomly.
Pair Corralation between Rexford Industrial and BRT Realty
Given the investment horizon of 90 days Rexford Industrial is expected to generate 14.97 times less return on investment than BRT Realty. In addition to that, Rexford Industrial is 1.11 times more volatile than BRT Realty Trust. It trades about 0.01 of its total potential returns per unit of risk. BRT Realty Trust is currently generating about 0.18 per unit of volatility. If you would invest 1,700 in BRT Realty Trust on February 13, 2024 and sell it today you would earn a total of 107.00 from holding BRT Realty Trust or generate 6.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Rexford Industrial Realty vs. BRT Realty Trust
Performance |
Timeline |
Rexford Industrial Realty |
BRT Realty Trust |
Rexford Industrial and BRT Realty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rexford Industrial and BRT Realty
The main advantage of trading using opposite Rexford Industrial and BRT Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexford Industrial position performs unexpectedly, BRT Realty 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 BRT Realty will offset losses from the drop in BRT Realty'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 |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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