Correlation Between Public Storage and First Industrial
Can any of the company-specific risk be diversified away by investing in both Public Storage 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 Public Storage and First Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and First Industrial Realty, you can compare the effects of market volatilities on Public Storage 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 Public Storage with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and First Industrial.
Diversification Opportunities for Public Storage and First Industrial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Public and First is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage 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 Public Storage 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 Public Storage 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 Public Storage i.e., Public Storage and First Industrial go up and down completely randomly.
Pair Corralation between Public Storage and First Industrial
Assuming the 90 days trading horizon Public Storage is expected to under-perform the First Industrial. But the preferred stock apears to be less risky and, when comparing its historical volatility, Public Storage is 1.79 times less risky than First Industrial. The preferred stock trades about -0.11 of its potential returns per unit of risk. The First Industrial Realty is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,284 in First Industrial Realty on August 30, 2024 and sell it today you would earn a total of 124.00 from holding First Industrial Realty or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. First Industrial Realty
Performance |
| Timeline |
| Public Storage |
| First Industrial Realty |
Public Storage and First Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and First Industrial
The main advantage of trading using opposite Public Storage and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage 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.| Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public Storage vs. Public Storage |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |