Correlation Between First Industrial and Comstock Holding
Can any of the company-specific risk be diversified away by investing in both First Industrial and Comstock Holding 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 First Industrial and Comstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Industrial Realty and Comstock Holding Companies, you can compare the effects of market volatilities on First Industrial and Comstock Holding 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 First Industrial with a short position of Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Comstock Holding.
Diversification Opportunities for First Industrial and Comstock Holding
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Comstock is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Comstock Holding Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Holding Com and First 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 First Industrial Realty are associated (or correlated) with Comstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Holding Com has no effect on the direction of First Industrial i.e., First Industrial and Comstock Holding go up and down completely randomly.
Pair Corralation between First Industrial and Comstock Holding
Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 0.17 times more return on investment than Comstock Holding. However, First Industrial Realty is 5.93 times less risky than Comstock Holding. It trades about 0.11 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about -0.09 per unit of risk. If you would invest 4,542 in First Industrial Realty on March 1, 2024 and sell it today you would earn a total of 116.00 from holding First Industrial Realty or generate 2.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
First Industrial Realty vs. Comstock Holding Companies
Performance |
Timeline |
First Industrial Realty |
Comstock Holding Com |
First Industrial and Comstock Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Industrial and Comstock Holding
The main advantage of trading using opposite First Industrial and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Comstock Holding 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 Comstock Holding will offset losses from the drop in Comstock Holding's long position.First Industrial vs. LXP Industrial Trust | First Industrial vs. Plymouth Industrial REIT | First Industrial vs. Global Self Storage | First Industrial vs. Terreno Realty |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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