Correlation Between First Industrial and MDJM
Can any of the company-specific risk be diversified away by investing in both First Industrial and MDJM 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 MDJM 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 MDJM, you can compare the effects of market volatilities on First Industrial and MDJM 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 MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and MDJM.
Diversification Opportunities for First Industrial and MDJM
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and MDJM is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM 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 MDJM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDJM has no effect on the direction of First Industrial i.e., First Industrial and MDJM go up and down completely randomly.
Pair Corralation between First Industrial and MDJM
Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 0.08 times more return on investment than MDJM. However, First Industrial Realty is 12.28 times less risky than MDJM. It trades about -0.1 of its potential returns per unit of risk. MDJM is currently generating about -0.08 per unit of risk. If you would invest 5,357 in First Industrial Realty on September 26, 2024 and sell it today you would lose (275.00) from holding First Industrial Realty or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Industrial Realty vs. MDJM
Performance |
| Timeline |
| First Industrial Realty |
| MDJM |
First Industrial and MDJM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and MDJM
The main advantage of trading using opposite First Industrial and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, MDJM 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 MDJM will offset losses from the drop in MDJM's long position.| First Industrial vs. Realty Income | First Industrial vs. Park Hotels Resorts | First Industrial vs. Power REIT | First Industrial vs. Urban Edge Properties |
| MDJM vs. Wetouch Technology Common | MDJM vs. New Concept Energy | MDJM vs. DigitalBridge Group | MDJM vs. DigitalBridge Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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