Correlation Between Global Self and Rexford Industrial

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

By analyzing existing cross correlation between Global Self Storage and Rexford Industrial Realty, you can compare the effects of market volatilities on Global Self 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 Global Self with a short position of Rexford Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Self and Rexford Industrial.

Diversification Opportunities for Global Self and Rexford Industrial

0.04

Correlation Coefficient

Global Self  Rexford Industrial

Significant diversification

The 3 months correlation between Global and Rexford is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global Self Storage 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 Global Self 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 Global Self Storage 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 Global Self i.e., Global Self and Rexford Industrial go up and down completely randomly.

Pair Corralation between Global Self and Rexford Industrial

Given the investment horizon of 90 days Global Self Storage is expected to generate 0.88 times more return on investment than Rexford Industrial. However, Global Self Storage is 1.13 times less risky than Rexford Industrial. It trades about 0.13 of its potential returns per unit of risk. Rexford Industrial Realty is currently generating about -0.13 per unit of risk. If you would invest  501.00  in Global Self Storage on August 28, 2024 and sell it today you would earn a total of  17.00  from holding Global Self Storage or generate 3.39% return on investment over 90 days.

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

Global Self Storage  vs.  Rexford Industrial Realty

Global Self Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Global Self is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Global Self and Rexford Industrial

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

The idea behind Global Self Storage and Rexford Industrial Realty 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.