Correlation Between First Industrial and Site Centers
Can any of the company-specific risk be diversified away by investing in both First Industrial and Site 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 Site 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 Site Centers Corp, you can compare the effects of market volatilities on First Industrial and Site 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 Site Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Site Centers.
Diversification Opportunities for First Industrial and Site Centers
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Site is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Site Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Site Centers 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 Site Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Site Centers Corp has no effect on the direction of First Industrial i.e., First Industrial and Site Centers go up and down completely randomly.
Pair Corralation between First Industrial and Site Centers
Allowing for the 90-day total investment horizon First Industrial is expected to generate 3.65 times less return on investment than Site Centers. But when comparing it to its historical volatility, First Industrial Realty is 1.87 times less risky than Site Centers. It trades about 0.03 of its potential returns per unit of risk. Site Centers Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 864.00 in Site Centers Corp on August 30, 2024 and sell it today you would earn a total of 699.00 from holding Site Centers Corp or generate 80.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Industrial Realty vs. Site Centers Corp
Performance |
| Timeline |
| First Industrial Realty |
| Site Centers Corp |
First Industrial and Site Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Site Centers
The main advantage of trading using opposite First Industrial and Site Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Site 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 Site Centers will offset losses from the drop in Site 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 |
| Site Centers vs. Saul Centers | Site Centers vs. Acadia Realty Trust | Site Centers vs. Kite Realty Group | Site Centers vs. Retail Opportunity Investments |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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