Correlation Between 127097AG8 and LXP Industrial

Can any of the company-specific risk be diversified away by investing in both 127097AG8 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 127097AG8 and LXP Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CTRA 39 15 MAY 27 and LXP Industrial Trust, you can compare the effects of market volatilities on 127097AG8 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 127097AG8 with a short position of LXP Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 127097AG8 and LXP Industrial.

Diversification Opportunities for 127097AG8 and LXP Industrial

0.6

Correlation Coefficient

127097AG8  LXP Industrial

Poor diversification

The 3 months correlation between 127097AG8 and LXP is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CTRA 39 15 MAY 27 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 127097AG8 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 CTRA 39 15 MAY 27 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 127097AG8 i.e., 127097AG8 and LXP Industrial go up and down completely randomly.

Pair Corralation between 127097AG8 and LXP Industrial

Assuming the 90 days trading horizon CTRA 39 15 MAY 27 is expected to generate 0.24 times more return on investment than LXP Industrial. However, CTRA 39 15 MAY 27 is 4.09 times less risky than LXP Industrial. It trades about -0.14 of its potential returns per unit of risk. LXP Industrial Trust is currently generating about -0.09 per unit of risk. If you would invest  9,838  in CTRA 39 15 MAY 27 on September 4, 2024 and sell it today you would lose (231.00) from holding CTRA 39 15 MAY 27 or give up 2.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.48%
Values	Daily Returns

CTRA 39 15 MAY 27  vs.  LXP Industrial Trust

CTRA 15 MAY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTRA 39 15 MAY 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 127097AG8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

LXP Industrial Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LXP Industrial Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with 127097AG8 and LXP Industrial

The main advantage of trading using opposite 127097AG8 and LXP Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 127097AG8 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.

The idea behind CTRA 39 15 MAY 27 and LXP Industrial 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.