Correlation Between Equinix and First Industrial
Can any of the company-specific risk be diversified away by investing in both Equinix 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 Equinix and First Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and First Industrial Realty, you can compare the effects of market volatilities on Equinix 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 Equinix with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and First Industrial.
Diversification Opportunities for Equinix and First Industrial
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Equinix and First is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Equinix 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 Equinix 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 Equinix 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 Equinix i.e., Equinix and First Industrial go up and down completely randomly.
Pair Corralation between Equinix and First Industrial
Given the investment horizon of 90 days Equinix is expected to generate 1.13 times more return on investment than First Industrial. However, Equinix is 1.13 times more volatile than First Industrial Realty. It trades about 0.06 of its potential returns per unit of risk. First Industrial Realty is currently generating about 0.03 per unit of risk. If you would invest 65,665 in Equinix on August 29, 2024 and sell it today you would earn a total of 32,245 from holding Equinix or generate 49.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinix vs. First Industrial Realty
Performance |
| Timeline |
| Equinix |
| First Industrial Realty |
Equinix and First Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and First Industrial
The main advantage of trading using opposite Equinix and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix 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.| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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