Correlation Between First Industrial and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both First Industrial and JBG SMITH 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 JBG SMITH 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 JBG SMITH Properties, you can compare the effects of market volatilities on First Industrial and JBG SMITH 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 JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and JBG SMITH.
Diversification Opportunities for First Industrial and JBG SMITH
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and JBG is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and JBG SMITH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBG SMITH Properties 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 JBG SMITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBG SMITH Properties has no effect on the direction of First Industrial i.e., First Industrial and JBG SMITH go up and down completely randomly.
Pair Corralation between First Industrial and JBG SMITH
Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 0.68 times more return on investment than JBG SMITH. However, First Industrial Realty is 1.46 times less risky than JBG SMITH. It trades about 0.11 of its potential returns per unit of risk. JBG SMITH Properties is currently generating about -0.03 per unit of risk. If you would invest 5,259 in First Industrial Realty on December 1, 2024 and sell it today you would earn a total of 449.00 from holding First Industrial Realty or generate 8.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
First Industrial Realty vs. JBG SMITH Properties
Performance |
Timeline |
First Industrial Realty |
JBG SMITH Properties |
First Industrial and JBG SMITH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Industrial and JBG SMITH
The main advantage of trading using opposite First Industrial and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, JBG SMITH 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 JBG SMITH will offset losses from the drop in JBG SMITH's long position.First Industrial vs. LXP Industrial Trust | First Industrial vs. Plymouth Industrial REIT | First Industrial vs. Global Self Storage | First Industrial vs. Terreno Realty |
JBG SMITH vs. Boston Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Kilroy Realty Corp | JBG SMITH vs. Alexandria Real Estate |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Stocks Directory Find actively traded stocks across global markets | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |