Correlation Between First Industrial and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both First Industrial and Cohen Steers 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 Cohen Steers 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 Cohen Steers Realty, you can compare the effects of market volatilities on First Industrial and Cohen Steers 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 Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Cohen Steers.
Diversification Opportunities for First Industrial and Cohen Steers
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Cohen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Cohen Steers Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Realty 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 Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Realty has no effect on the direction of First Industrial i.e., First Industrial and Cohen Steers go up and down completely randomly.
Pair Corralation between First Industrial and Cohen Steers
Allowing for the 90-day total investment horizon First Industrial is expected to generate 1.32 times less return on investment than Cohen Steers. In addition to that, First Industrial is 1.24 times more volatile than Cohen Steers Realty. It trades about 0.01 of its total potential returns per unit of risk. Cohen Steers Realty is currently generating about 0.02 per unit of volatility. If you would invest 6,135 in Cohen Steers Realty on November 2, 2024 and sell it today you would earn a total of 549.00 from holding Cohen Steers Realty or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
First Industrial Realty vs. Cohen Steers Realty
Performance |
| Timeline |
| First Industrial Realty |
| Cohen Steers Realty |
First Industrial and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Cohen Steers
The main advantage of trading using opposite First Industrial and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Cohen Steers 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 Cohen Steers will offset losses from the drop in Cohen Steers' 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 |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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