Correlation Between EastGroup Properties and First Industrial
Can any of the company-specific risk be diversified away by investing in both EastGroup Properties 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 EastGroup Properties and First Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EastGroup Properties and First Industrial Realty, you can compare the effects of market volatilities on EastGroup Properties 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 EastGroup Properties with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and First Industrial.
Diversification Opportunities for EastGroup Properties and First Industrial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EastGroup and First is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties 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 EastGroup Properties 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 EastGroup Properties 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 EastGroup Properties i.e., EastGroup Properties and First Industrial go up and down completely randomly.
Pair Corralation between EastGroup Properties and First Industrial
Considering the 90-day investment horizon EastGroup Properties is expected to generate 3.75 times less return on investment than First Industrial. But when comparing it to its historical volatility, EastGroup Properties is 1.08 times less risky than First Industrial. It trades about 0.02 of its potential returns per unit of risk. First Industrial Realty is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,451 in First Industrial Realty on August 24, 2024 and sell it today you would earn a total of 818.00 from holding First Industrial Realty or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EastGroup Properties vs. First Industrial Realty
Performance |
| Timeline |
| EastGroup Properties |
| First Industrial Realty |
EastGroup Properties and First Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EastGroup Properties and First Industrial
The main advantage of trading using opposite EastGroup Properties and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties 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.| EastGroup Properties vs. Terreno Realty | EastGroup Properties vs. Plymouth Industrial REIT | EastGroup Properties vs. LXP Industrial Trust | EastGroup Properties vs. First Industrial Realty |
| First Industrial vs. LXP Industrial Trust | First Industrial vs. Plymouth Industrial REIT | First Industrial vs. Global Self Storage | First Industrial vs. Terreno Realty |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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