Correlation Between First Industrial and Segro Plc
Can any of the company-specific risk be diversified away by investing in both First Industrial and Segro Plc 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 Segro Plc 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 Segro Plc, you can compare the effects of market volatilities on First Industrial and Segro Plc 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 Segro Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Segro Plc.
Diversification Opportunities for First Industrial and Segro Plc
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Segro is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Segro Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Segro Plc 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 Segro Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Segro Plc has no effect on the direction of First Industrial i.e., First Industrial and Segro Plc go up and down completely randomly.
Pair Corralation between First Industrial and Segro Plc
Allowing for the 90-day total investment horizon First Industrial is expected to generate 1.48 times less return on investment than Segro Plc. But when comparing it to its historical volatility, First Industrial Realty is 2.18 times less risky than Segro Plc. It trades about 0.03 of its potential returns per unit of risk. Segro Plc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 958.00 in Segro Plc on August 31, 2024 and sell it today you would earn a total of 63.00 from holding Segro Plc or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 78.83% |
| Values | Daily Returns |
First Industrial Realty vs. Segro Plc
Performance |
| Timeline |
| First Industrial Realty |
| Segro Plc |
First Industrial and Segro Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Segro Plc
The main advantage of trading using opposite First Industrial and Segro Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Segro Plc 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 Segro Plc will offset losses from the drop in Segro Plc'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 |
| Segro Plc vs. LXP Industrial Trust | Segro Plc vs. First Industrial Realty | Segro Plc vs. Plymouth Industrial REIT | Segro Plc vs. Terreno Realty |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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