Correlation Between Indus Realty and First Industrial

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

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

Diversification Opportunities for Indus Realty and First Industrial

0.0

Correlation Coefficient

Indus Realty  First Industrial

Pay attention - limited upside

The 3 months correlation between Indus and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indus Realty Trust and First Industrial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Industrial Realty and Indus 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 Indus Realty Trust are associated (or correlated) with First Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Industrial Realty has no effect on the direction of Indus Realty i.e., Indus Realty and First Industrial go up and down completely randomly.

Pair Corralation between Indus Realty and First Industrial

If you would invest  5,000  in First Industrial Realty on December 27, 2024 and sell it today you would earn a total of  425.00  from holding First Industrial Realty or generate 8.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Indus Realty Trust  vs.  First Industrial Realty

Indus Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indus Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Indus Realty is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Indus Realty and First Industrial

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

The idea behind Indus Realty Trust and First Industrial Realty 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.