Correlation Between Americold Realty and Rexford Industrial

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

Diversification Opportunities for Americold Realty and Rexford Industrial

0.7

Correlation Coefficient

Americold Realty  Rexford Industrial

Poor diversification

The 3 months correlation between Americold and Rexford is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Americold Realty Trust 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 Americold 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 Americold Realty Trust 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 Americold Realty i.e., Americold Realty and Rexford Industrial go up and down completely randomly.

Pair Corralation between Americold Realty and Rexford Industrial

Given the investment horizon of 90 days Americold Realty Trust is expected to generate 1.16 times more return on investment than Rexford Industrial. However, Americold Realty is 1.16 times more volatile than Rexford Industrial Realty. It trades about 0.05 of its potential returns per unit of risk. Rexford Industrial Realty is currently generating about 0.04 per unit of risk. If you would invest  2,076  in Americold Realty Trust on December 30, 2024 and sell it today you would earn a total of  112.00  from holding Americold Realty Trust or generate 5.39% return on investment over 90 days.

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

Americold Realty Trust  vs.  Rexford Industrial Realty

Americold Realty Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Americold Realty Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Americold Realty may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Rexford Industrial Realty

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rexford Industrial Realty are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Rexford Industrial is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Americold Realty and Rexford Industrial

The main advantage of trading using opposite Americold Realty and Rexford Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americold 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 Americold Realty Trust 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.