Correlation Between First Industrial and Frasers Logistics
Can any of the company-specific risk be diversified away by investing in both First Industrial and Frasers Logistics 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 Frasers Logistics 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 Frasers Logistics Commercial, you can compare the effects of market volatilities on First Industrial and Frasers Logistics 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 Frasers Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Frasers Logistics.
Diversification Opportunities for First Industrial and Frasers Logistics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Frasers is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Frasers Logistics Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frasers Logistics 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 Frasers Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frasers Logistics has no effect on the direction of First Industrial i.e., First Industrial and Frasers Logistics go up and down completely randomly.
Pair Corralation between First Industrial and Frasers Logistics
Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 0.78 times more return on investment than Frasers Logistics. However, First Industrial Realty is 1.29 times less risky than Frasers Logistics. It trades about 0.02 of its potential returns per unit of risk. Frasers Logistics Commercial is currently generating about 0.01 per unit of risk. If you would invest 4,794 in First Industrial Realty on September 3, 2024 and sell it today you would earn a total of 551.00 from holding First Industrial Realty or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
First Industrial Realty vs. Frasers Logistics Commercial
Performance |
| Timeline |
| First Industrial Realty |
| Frasers Logistics |
First Industrial and Frasers Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Frasers Logistics
The main advantage of trading using opposite First Industrial and Frasers Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Frasers Logistics 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 Frasers Logistics will offset losses from the drop in Frasers Logistics' long position.| First Industrial vs. SCOR PK | First Industrial vs. Aquagold International | First Industrial vs. SPACE | First Industrial vs. T Rowe Price |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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