Correlation Between Innovative Industrial and First Industrial
Can any of the company-specific risk be diversified away by investing in both Innovative 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 Innovative 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 Innovative Industrial Properties and First Industrial Realty, you can compare the effects of market volatilities on Innovative 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 Innovative Industrial with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Industrial and First Industrial.
Diversification Opportunities for Innovative Industrial and First Industrial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innovative and First is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Industrial Properti 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 Innovative 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 Innovative Industrial 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 Innovative Industrial i.e., Innovative Industrial and First Industrial go up and down completely randomly.
Pair Corralation between Innovative Industrial and First Industrial
Given the investment horizon of 90 days Innovative Industrial Properties is expected to generate 1.01 times more return on investment than First Industrial. However, Innovative Industrial is 1.01 times more volatile than First Industrial Realty. It trades about -0.07 of its potential returns per unit of risk. First Industrial Realty is currently generating about -0.26 per unit of risk. If you would invest 10,176 in Innovative Industrial Properties on January 26, 2024 and sell it today you would lose (307.00) from holding Innovative Industrial Properties or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Industrial Properti vs. First Industrial Realty
Performance |
| Timeline |
| Innovative Industrial |
| First Industrial Realty |
Innovative Industrial and First Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Industrial and First Industrial
The main advantage of trading using opposite Innovative Industrial and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative 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.| Innovative Industrial vs. Plymouth Industrial REIT | Innovative Industrial vs. EastGroup Properties | Innovative Industrial vs. LXP Industrial Trust | Innovative Industrial vs. First 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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