Correlation Between LXP Industrial and T Rowe

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

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

Diversification Opportunities for LXP Industrial and T Rowe

0.36

Correlation Coefficient

LXP Industrial  T Rowe

Weak diversification

The 3 months correlation between LXP and RRTLX is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding LXP Industrial Trust and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and LXP Industrial 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 LXP Industrial Trust are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of LXP Industrial i.e., LXP Industrial and T Rowe go up and down completely randomly.

Pair Corralation between LXP Industrial and T Rowe

Considering the 90-day investment horizon LXP Industrial Trust is expected to generate 4.33 times more return on investment than T Rowe. However, LXP Industrial is 4.33 times more volatile than T Rowe Price. It trades about 0.11 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.08 per unit of risk. If you would invest  808.00  in LXP Industrial Trust on December 27, 2024 and sell it today you would earn a total of  79.00  from holding LXP Industrial Trust or generate 9.78% return on investment over 90 days.

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

LXP Industrial Trust  vs.  T Rowe Price

LXP Industrial Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LXP Industrial Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, LXP Industrial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

T Rowe Price

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, T Rowe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LXP Industrial and T Rowe

The main advantage of trading using opposite LXP Industrial and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LXP Industrial position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.

The idea behind LXP Industrial Trust and T Rowe Price 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 Stocks Directory module to find actively traded stocks across global markets.