Correlation Between First Industrial and Franklin Real
Can any of the company-specific risk be diversified away by investing in both First Industrial and Franklin 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 Franklin 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 Franklin Real Estate, you can compare the effects of market volatilities on First Industrial and Franklin 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 Franklin Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Franklin Real.
Diversification Opportunities for First Industrial and Franklin Real
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Franklin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Franklin Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin 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 Franklin Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Real Estate has no effect on the direction of First Industrial i.e., First Industrial and Franklin Real go up and down completely randomly.
Pair Corralation between First Industrial and Franklin Real
Allowing for the 90-day total investment horizon First Industrial is expected to generate 5.61 times less return on investment than Franklin Real. In addition to that, First Industrial is 1.08 times more volatile than Franklin Real Estate. It trades about 0.02 of its total potential returns per unit of risk. Franklin Real Estate is currently generating about 0.12 per unit of volatility. If you would invest 1,951 in Franklin Real Estate on September 4, 2024 and sell it today you would earn a total of 46.00 from holding Franklin Real Estate or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Industrial Realty vs. Franklin Real Estate
Performance |
| Timeline |
| First Industrial Realty |
| Franklin Real Estate |
First Industrial and Franklin Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Franklin Real
The main advantage of trading using opposite First Industrial and Franklin Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Franklin 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 Franklin Real will offset losses from the drop in Franklin 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 |
| Franklin Real vs. Realty Income | Franklin Real vs. Dynex Capital | Franklin Real vs. First Industrial Realty | Franklin 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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