Correlation Between Prologis and First Industrial
Can any of the company-specific risk be diversified away by investing in both Prologis 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 Prologis and First Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prologis and First Industrial Realty, you can compare the effects of market volatilities on Prologis 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 Prologis with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prologis and First Industrial.
Diversification Opportunities for Prologis and First Industrial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Prologis and First is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Prologis 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 Prologis 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 Prologis 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 Prologis i.e., Prologis and First Industrial go up and down completely randomly.
Pair Corralation between Prologis and First Industrial
Assuming the 90 days horizon Prologis is expected to under-perform the First Industrial. But the otc stock apears to be less risky and, when comparing its historical volatility, Prologis is 1.07 times less risky than First Industrial. The otc stock trades about -0.23 of its potential returns per unit of risk. The First Industrial Realty is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 5,375 in First Industrial Realty on November 28, 2024 and sell it today you would earn a total of 291.00 from holding First Industrial Realty or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prologis vs. First Industrial Realty
Performance |
| Timeline |
| Prologis |
| First Industrial Realty |
Prologis and First Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prologis and First Industrial
The main advantage of trading using opposite Prologis and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prologis 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.| Prologis vs. Rexford Industrial Realty | Prologis vs. LXP Industrial Trust | Prologis vs. Public Storage | Prologis vs. Rexford Industrial 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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