Correlation Between First Industrial and Pimco Realestaterealre

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

Diversification Opportunities for First Industrial and Pimco Realestaterealre

0.84

Correlation Coefficient

First Industrial  Pimco Realestaterealre

Very poor diversification

The 3 months correlation between First and Pimco is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Pimco Realestaterealreturn Str in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Realestaterealre 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 Pimco Realestaterealre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Realestaterealre has no effect on the direction of First Industrial i.e., First Industrial and Pimco Realestaterealre go up and down completely randomly.

Pair Corralation between First Industrial and Pimco Realestaterealre

Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 1.24 times more return on investment than Pimco Realestaterealre. However, First Industrial is 1.24 times more volatile than Pimco Realestaterealreturn Strategy. It trades about 0.1 of its potential returns per unit of risk. Pimco Realestaterealreturn Strategy is currently generating about 0.05 per unit of risk. If you would invest  5,000  in First Industrial Realty on December 27, 2024 and sell it today you would earn a total of  410.00  from holding First Industrial Realty or generate 8.2% return on investment over 90 days.

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

First Industrial Realty  vs.  Pimco Realestaterealreturn Str

First Industrial Realty

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Industrial Realty are ranked lower than 8 (%) 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.

Pimco Realestaterealre

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Realestaterealreturn Strategy are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Realestaterealre is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Industrial and Pimco Realestaterealre

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

The idea behind First Industrial Realty and Pimco Realestaterealreturn Strategy 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.