Correlation Between Belpointe PREP and First Industrial

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

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

Diversification Opportunities for Belpointe PREP and First Industrial

-0.42

Correlation Coefficient

Belpointe PREP  First Industrial

Very good diversification

The 3 months correlation between Belpointe and First is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Belpointe PREP LLC 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 Belpointe PREP 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 Belpointe PREP LLC 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 Belpointe PREP i.e., Belpointe PREP and First Industrial go up and down completely randomly.

Pair Corralation between Belpointe PREP and First Industrial

Allowing for the 90-day total investment horizon Belpointe PREP LLC is expected to under-perform the First Industrial. In addition to that, Belpointe PREP is 1.77 times more volatile than First Industrial Realty. It trades about -0.1 of its total potential returns per unit of risk. First Industrial Realty is currently generating about 0.09 per unit of volatility. If you would invest  5,306  in First Industrial Realty on November 28, 2024 and sell it today you would earn a total of  376.00  from holding First Industrial Realty or generate 7.09% return on investment over 90 days.

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

Belpointe PREP LLC  vs.  First Industrial Realty

Belpointe PREP LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Belpointe PREP LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company 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 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 March 2025.

Pair Trading with Belpointe PREP and First Industrial

The main advantage of trading using opposite Belpointe PREP and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belpointe PREP 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 Belpointe PREP LLC 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.