Correlation Between First Industrial and Real Estate

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both First Industrial and Real Estate 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 Real Estate 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 Real Estate Securities, you can compare the effects of market volatilities on First Industrial and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Real Estate.

Diversification Opportunities for First Industrial and Real Estate

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between First and Real is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Real Estate Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Securities 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Securities has no effect on the direction of First Industrial i.e., First Industrial and Real Estate go up and down completely randomly.

Pair Corralation between First Industrial and Real Estate

Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 1.31 times more return on investment than Real Estate. However, First Industrial is 1.31 times more volatile than Real Estate Securities. It trades about -0.2 of its potential returns per unit of risk. Real Estate Securities is currently generating about -0.29 per unit of risk. If you would invest  5,299  in First Industrial Realty on September 20, 2024 and sell it today you would lose (293.00) from holding First Industrial Realty or give up 5.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

First Industrial Realty  vs.  Real Estate Securities

 Performance 
       Timeline  
First Industrial Realty 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days First Industrial Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.
Real Estate Securities 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Real Estate Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

First Industrial and Real Estate Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with First Industrial and Real Estate

The main advantage of trading using opposite First Industrial and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.
The idea behind First Industrial Realty and Real Estate Securities 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.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas