Correlation Between First Industrial and PS Business
Can any of the company-specific risk be diversified away by investing in both First Industrial and PS Business 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 PS Business 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 PS Business Parks, you can compare the effects of market volatilities on First Industrial and PS Business 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 PS Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and PS Business.
Diversification Opportunities for First Industrial and PS Business
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and PSBYP is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and PS Business Parks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PS Business Parks 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 PS Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PS Business Parks has no effect on the direction of First Industrial i.e., First Industrial and PS Business go up and down completely randomly.
Pair Corralation between First Industrial and PS Business
If you would invest 1,400 in PS Business Parks on August 25, 2024 and sell it today you would earn a total of 0.00 from holding PS Business Parks or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
First Industrial Realty vs. PS Business Parks
Performance |
| Timeline |
| First Industrial Realty |
| PS Business Parks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Industrial and PS Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and PS Business
The main advantage of trading using opposite First Industrial and PS Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, PS Business 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 PS Business will offset losses from the drop in PS Business' long position.| First Industrial vs. Boston Properties | First Industrial vs. Alexandria Real Estate | First Industrial vs. Highwoods Properties | First Industrial vs. Hudson Pacific Properties |
| PS Business vs. BioNTech SE | PS Business vs. Microbot Medical | PS Business vs. Paysafe | PS Business vs. Valneva SE ADR |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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