Correlation Between First Industrial and Dunham Real
Can any of the company-specific risk be diversified away by investing in both First Industrial and Dunham 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 Dunham 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 Dunham Real Estate, you can compare the effects of market volatilities on First Industrial and Dunham 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 Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Dunham Real.
Diversification Opportunities for First Industrial and Dunham Real
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Dunham is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham 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 Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of First Industrial i.e., First Industrial and Dunham Real go up and down completely randomly.
Pair Corralation between First Industrial and Dunham Real
Allowing for the 90-day total investment horizon First Industrial is expected to generate 1.68 times less return on investment than Dunham Real. In addition to that, First Industrial is 1.21 times more volatile than Dunham Real Estate. It trades about 0.04 of its total potential returns per unit of risk. Dunham Real Estate is currently generating about 0.08 per unit of volatility. If you would invest 1,242 in Dunham Real Estate on September 2, 2024 and sell it today you would earn a total of 287.00 from holding Dunham Real Estate or generate 23.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Industrial Realty vs. Dunham Real Estate
Performance |
| Timeline |
| First Industrial Realty |
| Dunham Real Estate |
First Industrial and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Dunham Real
The main advantage of trading using opposite First Industrial and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Dunham 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 Dunham Real will offset losses from the drop in Dunham 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 |
| Dunham Real vs. Realty Income | Dunham Real vs. Dynex Capital | Dunham Real vs. First Industrial Realty | Dunham Real vs. Healthcare Realty Trust |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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