Correlation Between Global Self and First Industrial
Can any of the company-specific risk be diversified away by investing in both Global Self 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 Global Self and First Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Self Storage and First Industrial Realty, you can compare the effects of market volatilities on Global Self 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 Global Self with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Self and First Industrial.
Diversification Opportunities for Global Self and First Industrial
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and First is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Global Self 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 Global Self 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 Global Self 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 Global Self i.e., Global Self and First Industrial go up and down completely randomly.
Pair Corralation between Global Self and First Industrial
Given the investment horizon of 90 days Global Self Storage is expected to under-perform the First Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Global Self Storage is 1.35 times less risky than First Industrial. The stock trades about -0.09 of its potential returns per unit of risk. The First Industrial Realty is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,948 in First Industrial Realty on November 2, 2024 and sell it today you would earn a total of 334.00 from holding First Industrial Realty or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Self Storage vs. First Industrial Realty
Performance |
| Timeline |
| Global Self Storage |
| First Industrial Realty |
Global Self and First Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Self and First Industrial
The main advantage of trading using opposite Global Self and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Self 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.| Global Self vs. LXP Industrial Trust | Global Self vs. First Industrial Realty | Global Self vs. Plymouth Industrial REIT | Global Self 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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