Correlation Between First Industrial and Saratoga Investment
Can any of the company-specific risk be diversified away by investing in both First Industrial and Saratoga Investment 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 Saratoga Investment 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 Saratoga Investment Corp, you can compare the effects of market volatilities on First Industrial and Saratoga Investment 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 Saratoga Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Saratoga Investment.
Diversification Opportunities for First Industrial and Saratoga Investment
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Saratoga is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Saratoga Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investment Corp 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 Saratoga Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investment Corp has no effect on the direction of First Industrial i.e., First Industrial and Saratoga Investment go up and down completely randomly.
Pair Corralation between First Industrial and Saratoga Investment
Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 3.24 times more return on investment than Saratoga Investment. However, First Industrial is 3.24 times more volatile than Saratoga Investment Corp. It trades about 0.29 of its potential returns per unit of risk. Saratoga Investment Corp is currently generating about 0.16 per unit of risk. If you would invest 5,352 in First Industrial Realty on November 29, 2024 and sell it today you would earn a total of 314.00 from holding First Industrial Realty or generate 5.87% 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. Saratoga Investment Corp
Performance |
| Timeline |
| First Industrial Realty |
| Saratoga Investment Corp |
First Industrial and Saratoga Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Saratoga Investment
The main advantage of trading using opposite First Industrial and Saratoga Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Saratoga Investment 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 Saratoga Investment will offset losses from the drop in Saratoga Investment'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 |
| Saratoga Investment vs. SCCG | Saratoga Investment vs. MSCI ACWI exAUCONSUMER | Saratoga Investment vs. B Riley Financial | Saratoga Investment vs. Runway Growth Finance |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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