Correlation Between First Industrial and Columbia Real
Can any of the company-specific risk be diversified away by investing in both First Industrial and Columbia Real 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 Columbia Real 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 Columbia Real Estate, you can compare the effects of market volatilities on First Industrial and Columbia Real 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 Columbia Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Columbia Real.
Diversification Opportunities for First Industrial and Columbia Real
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Columbia is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Columbia Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Real Estate 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 Columbia Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Real Estate has no effect on the direction of First Industrial i.e., First Industrial and Columbia Real go up and down completely randomly.
Pair Corralation between First Industrial and Columbia Real
Allowing for the 90-day total investment horizon First Industrial Realty is expected to under-perform the Columbia Real. In addition to that, First Industrial is 1.47 times more volatile than Columbia Real Estate. It trades about -0.08 of its total potential returns per unit of risk. Columbia Real Estate is currently generating about -0.11 per unit of volatility. If you would invest 1,130 in Columbia Real Estate on September 12, 2024 and sell it today you would lose (21.00) from holding Columbia Real Estate or give up 1.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Industrial Realty vs. Columbia Real Estate
Performance |
| Timeline |
| First Industrial Realty |
| Columbia Real Estate |
First Industrial and Columbia Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Columbia Real
The main advantage of trading using opposite First Industrial and Columbia Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Columbia Real 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 Columbia Real will offset losses from the drop in Columbia Real's long position.| First Industrial vs. LXP Industrial Trust | First Industrial vs. Plymouth Industrial REIT | First Industrial vs. Global Self Storage | First Industrial vs. Terreno Realty |
| Columbia Real vs. Hennessy Bp Energy | Columbia Real vs. Dreyfus Natural Resources | Columbia Real vs. Thrivent Natural Resources | Columbia Real vs. Gamco Natural Resources |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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