Correlation Between First Industrial and Regency Centers
Can any of the company-specific risk be diversified away by investing in both First Industrial and Regency Centers 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 Regency Centers 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 Regency Centers, you can compare the effects of market volatilities on First Industrial and Regency Centers 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 Regency Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Regency Centers.
Diversification Opportunities for First Industrial and Regency Centers
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Regency is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers 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 Regency Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regency Centers has no effect on the direction of First Industrial i.e., First Industrial and Regency Centers go up and down completely randomly.
Pair Corralation between First Industrial and Regency Centers
Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 1.1 times more return on investment than Regency Centers. However, First Industrial is 1.1 times more volatile than Regency Centers. It trades about 0.1 of its potential returns per unit of risk. Regency Centers is currently generating about -0.09 per unit of risk. If you would invest 5,284 in First Industrial Realty on August 30, 2024 and sell it today you would earn a total of 124.00 from holding First Industrial Realty or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Industrial Realty vs. Regency Centers
Performance |
| Timeline |
| First Industrial Realty |
| Regency Centers |
First Industrial and Regency Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Regency Centers
The main advantage of trading using opposite First Industrial and Regency Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Regency Centers 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 Regency Centers will offset losses from the drop in Regency Centers' 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 |
| Regency Centers vs. Tower One Wireless | Regency Centers vs. Employers Holdings | Regency Centers vs. Assurant | Regency Centers vs. Hooker Furniture |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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