Correlation Between Franklin Street and Alexandria Real
Can any of the company-specific risk be diversified away by investing in both Franklin Street and Alexandria Real 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 Franklin Street and Alexandria Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and Alexandria Real Estate, you can compare the effects of market volatilities on Franklin Street and Alexandria Real 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 Franklin Street with a short position of Alexandria Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and Alexandria Real.
Diversification Opportunities for Franklin Street and Alexandria Real
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Alexandria is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and Alexandria Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria Real Estate and Franklin Street 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 Franklin Street Properties are associated (or correlated) with Alexandria Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria Real Estate has no effect on the direction of Franklin Street i.e., Franklin Street and Alexandria Real go up and down completely randomly.
Pair Corralation between Franklin Street and Alexandria Real
Considering the 90-day investment horizon Franklin Street Properties is expected to generate 1.52 times more return on investment than Alexandria Real. However, Franklin Street is 1.52 times more volatile than Alexandria Real Estate. It trades about 0.04 of its potential returns per unit of risk. Alexandria Real Estate is currently generating about 0.01 per unit of risk. If you would invest 138.00 in Franklin Street Properties on August 31, 2024 and sell it today you would earn a total of 53.00 from holding Franklin Street Properties or generate 38.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Franklin Street Properties vs. Alexandria Real Estate
Performance |
| Timeline |
| Franklin Street Prop |
| Alexandria Real Estate |
Franklin Street and Alexandria Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and Alexandria Real
The main advantage of trading using opposite Franklin Street and Alexandria Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street position performs unexpectedly, Alexandria Real 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 Alexandria Real will offset losses from the drop in Alexandria Real's long position.| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
| Alexandria Real vs. Vornado Realty Trust | Alexandria Real vs. SL Green Realty | Alexandria Real vs. Kilroy Realty Corp | Alexandria Real vs. Highwoods Properties |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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