Correlation Between LXP Industrial and First Industrial
Can any of the company-specific risk be diversified away by investing in both LXP Industrial 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 LXP Industrial and First Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LXP Industrial Trust and First Industrial Realty, you can compare the effects of market volatilities on LXP Industrial 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 LXP Industrial with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LXP Industrial and First Industrial.
Diversification Opportunities for LXP Industrial and First Industrial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LXP and First is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding LXP Industrial Trust 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 LXP 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 LXP Industrial Trust 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 LXP Industrial i.e., LXP Industrial and First Industrial go up and down completely randomly.
Pair Corralation between LXP Industrial and First Industrial
Considering the 90-day investment horizon LXP Industrial is expected to generate 4.02 times less return on investment than First Industrial. In addition to that, LXP Industrial is 1.09 times more volatile than First Industrial Realty. It trades about 0.01 of its total potential returns per unit of risk. First Industrial Realty is currently generating about 0.03 per unit of volatility. If you would invest 4,732 in First Industrial Realty on August 26, 2024 and sell it today you would earn a total of 643.00 from holding First Industrial Realty or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LXP Industrial Trust vs. First Industrial Realty
Performance |
| Timeline |
| LXP Industrial Trust |
| First Industrial Realty |
LXP Industrial and First Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LXP Industrial and First Industrial
The main advantage of trading using opposite LXP Industrial and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LXP Industrial 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.| LXP Industrial vs. First Industrial Realty | LXP Industrial vs. Plymouth Industrial REIT | LXP Industrial vs. Global Self Storage | LXP Industrial vs. Terreno Realty |
| First Industrial vs. LXP Industrial Trust | First Industrial vs. Plymouth Industrial REIT | First Industrial vs. Global Self Storage | First Industrial 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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