Correlation Between Rexford Industrial and Americold Realty

Can any of the company-specific risk be diversified away by investing in both Rexford Industrial and Americold 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 Americold 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 Americold Realty Trust, you can compare the effects of market volatilities on Rexford Industrial and Americold 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 Americold Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexford Industrial and Americold Realty.

Diversification Opportunities for Rexford Industrial and Americold Realty

0.91

Correlation Coefficient

Rexford Industrial  Americold Realty

Almost no diversification

The 3 months correlation between Rexford and Americold is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Rexford Industrial Realty and Americold Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americold 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 Americold Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americold Realty Trust has no effect on the direction of Rexford Industrial i.e., Rexford Industrial and Americold Realty go up and down completely randomly.

Pair Corralation between Rexford Industrial and Americold Realty

Given the investment horizon of 90 days Rexford Industrial Realty is expected to generate 1.11 times more return on investment than Americold Realty. However, Rexford Industrial is 1.11 times more volatile than Americold Realty Trust. It trades about -0.14 of its potential returns per unit of risk. Americold Realty Trust is currently generating about -0.17 per unit of risk. If you would invest  5,048  in Rexford Industrial Realty on August 31, 2024 and sell it today you would lose (793.00) from holding Rexford Industrial Realty or give up 15.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Rexford Industrial Realty  vs.  Americold Realty Trust

Rexford Industrial Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rexford Industrial Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Americold Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Americold Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Rexford Industrial and Americold Realty

The main advantage of trading using opposite Rexford Industrial and Americold Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexford Industrial position performs unexpectedly, Americold 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 Americold Realty will offset losses from the drop in Americold Realty's long position.

The idea behind Rexford Industrial Realty and Americold Realty Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.