Correlation Between Highwoods Properties and First Industrial
Can any of the company-specific risk be diversified away by investing in both Highwoods Properties and First Industrial 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 Highwoods Properties and First Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highwoods Properties and First Industrial Realty, you can compare the effects of market volatilities on Highwoods Properties and First Industrial 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 Highwoods Properties with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwoods Properties and First Industrial.
Diversification Opportunities for Highwoods Properties and First Industrial
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highwoods and First is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Highwoods Properties and First Industrial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Industrial Realty and Highwoods Properties 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 Highwoods Properties are associated (or correlated) with First Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Industrial Realty has no effect on the direction of Highwoods Properties i.e., Highwoods Properties and First Industrial go up and down completely randomly.
Pair Corralation between Highwoods Properties and First Industrial
Considering the 90-day investment horizon Highwoods Properties is expected to under-perform the First Industrial. In addition to that, Highwoods Properties is 1.12 times more volatile than First Industrial Realty. It trades about -0.32 of its total potential returns per unit of risk. First Industrial Realty is currently generating about -0.05 per unit of volatility. If you would invest 5,455 in First Industrial Realty on August 25, 2024 and sell it today you would lose (80.00) from holding First Industrial Realty or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwoods Properties vs. First Industrial Realty
Performance |
| Timeline |
| Highwoods Properties |
| First Industrial Realty |
Highwoods Properties and First Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwoods Properties and First Industrial
The main advantage of trading using opposite Highwoods Properties and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwoods Properties position performs unexpectedly, First Industrial 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 First Industrial will offset losses from the drop in First Industrial's long position.| Highwoods Properties vs. Piedmont Office Realty | Highwoods Properties vs. Douglas Emmett | Highwoods Properties vs. Kilroy Realty Corp | Highwoods Properties vs. Hudson Pacific Properties |
| First Industrial vs. Boston Properties | First Industrial vs. Alexandria Real Estate | First Industrial vs. Highwoods Properties | First Industrial vs. Hudson Pacific 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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