Correlation Between REXFORD INDREALTY and National Storage

Can any of the company-specific risk be diversified away by investing in both REXFORD INDREALTY and National Storage 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 INDREALTY and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between REXFORD INDREALTY DL 01 and National Storage Affiliates, you can compare the effects of market volatilities on REXFORD INDREALTY and National Storage 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 INDREALTY with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of REXFORD INDREALTY and National Storage.

Diversification Opportunities for REXFORD INDREALTY and National Storage

0.24

Correlation Coefficient

REXFORD INDREALTY  National Storage

Modest diversification

The 3 months correlation between REXFORD and National is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding REXFORD INDREALTY DL 01 and National Storage Affiliates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage Aff and REXFORD INDREALTY 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 INDREALTY DL 01 are associated (or correlated) with National Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storage Aff has no effect on the direction of REXFORD INDREALTY i.e., REXFORD INDREALTY and National Storage go up and down completely randomly.

Pair Corralation between REXFORD INDREALTY and National Storage

Assuming the 90 days horizon REXFORD INDREALTY DL 01 is expected to under-perform the National Storage. But the stock apears to be less risky and, when comparing its historical volatility, REXFORD INDREALTY DL 01 is 1.04 times less risky than National Storage. The stock trades about -0.03 of its potential returns per unit of risk. The National Storage Affiliates is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,280  in National Storage Affiliates on December 4, 2024 and sell it today you would earn a total of  450.00  from holding National Storage Affiliates or generate 13.72% return on investment over 90 days.

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

REXFORD INDREALTY DL 01  vs.  National Storage Affiliates

REXFORD INDREALTY

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in REXFORD INDREALTY DL 01 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, REXFORD INDREALTY is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

National Storage Aff

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Storage Affiliates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with REXFORD INDREALTY and National Storage

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

The idea behind REXFORD INDREALTY DL 01 and National Storage Affiliates 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.