Correlation Between First Industrial and Frp Holdings

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

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

Diversification Opportunities for First Industrial and Frp Holdings

0.2

Correlation Coefficient

First Industrial  Frp Holdings

Modest diversification

The 3 months correlation between First and Frp is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Frp Holdings Ord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frp Holdings Ord and First 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 First Industrial Realty are associated (or correlated) with Frp Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frp Holdings Ord has no effect on the direction of First Industrial i.e., First Industrial and Frp Holdings go up and down completely randomly.

Pair Corralation between First Industrial and Frp Holdings

Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 0.89 times more return on investment than Frp Holdings. However, First Industrial Realty is 1.12 times less risky than Frp Holdings. It trades about 0.09 of its potential returns per unit of risk. Frp Holdings Ord is currently generating about -0.04 per unit of risk. If you would invest  5,066  in First Industrial Realty on December 26, 2024 and sell it today you would earn a total of  375.00  from holding First Industrial Realty or generate 7.4% return on investment over 90 days.

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

First Industrial Realty  vs.  Frp Holdings Ord

First Industrial Realty

Risk-Adjusted Performance

Modest

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

Frp Holdings Ord

Risk-Adjusted Performance

Very Weak

Over the last 90 days Frp Holdings Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Frp Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with First Industrial and Frp Holdings

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

The idea behind First Industrial Realty and Frp Holdings Ord 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.