Correlation Between Terreno Realty and Rexford Industrial

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

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

Diversification Opportunities for Terreno Realty and Rexford Industrial

0.39

Correlation Coefficient

Terreno Realty  Rexford Industrial

Weak diversification

The 3 months correlation between Terreno and Rexford is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Realty 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 Terreno Realty 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 Terreno Realty 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 Terreno Realty i.e., Terreno Realty and Rexford Industrial go up and down completely randomly.

Pair Corralation between Terreno Realty and Rexford Industrial

Given the investment horizon of 90 days Terreno Realty is expected to under-perform the Rexford Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Terreno Realty is 1.0 times less risky than Rexford Industrial. The stock trades about -0.02 of its potential returns per unit of risk. The Rexford Industrial Realty is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,328  in Rexford Industrial Realty on May 6, 2025 and sell it today you would earn a total of  264.00  from holding Rexford Industrial Realty or generate 7.93% return on investment over 90 days.

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

Terreno Realty  vs.  Rexford Industrial Realty

Terreno Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Terreno Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Terreno Realty is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Rexford Industrial Realty

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rexford Industrial Realty are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Rexford Industrial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Terreno Realty and Rexford Industrial

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

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.