Correlation Between Americold Realty and Innovative Industrial

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

Diversification Opportunities for Americold Realty and Innovative Industrial

0.02

Correlation Coefficient

Americold Realty  Innovative Industrial

Significant diversification

The 3 months correlation between Americold and Innovative is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Americold Realty Trust and Innovative Industrial Properti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Industrial 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 Innovative Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Industrial has no effect on the direction of Americold Realty i.e., Americold Realty and Innovative Industrial go up and down completely randomly.

Pair Corralation between Americold Realty and Innovative Industrial

Given the investment horizon of 90 days Americold Realty Trust is expected to generate 1.13 times more return on investment than Innovative Industrial. However, Americold Realty is 1.13 times more volatile than Innovative Industrial Properties. It trades about -0.04 of its potential returns per unit of risk. Innovative Industrial Properties is currently generating about -0.25 per unit of risk. If you would invest  2,575  in Americold Realty Trust on March 20, 2024 and sell it today you would lose (26.00) from holding Americold Realty Trust or give up 1.01% of portfolio value over 90 days.

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

Americold Realty Trust  vs.  Innovative Industrial Properti

Americold Realty Trust

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Americold Realty Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Americold Realty is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Innovative Industrial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Industrial Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Innovative Industrial may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Americold Realty and Innovative Industrial

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

The idea behind Americold Realty Trust and Innovative Industrial Properties 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 Global Correlations module to find global opportunities by holding instruments from different markets.