Correlation Between First Industrial and Braemar Hotel

Can any of the company-specific risk be diversified away by investing in both First Industrial and Braemar Hotel 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 Braemar Hotel 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 Braemar Hotel Resorts, you can compare the effects of market volatilities on First Industrial and Braemar Hotel 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 Braemar Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Braemar Hotel.

Diversification Opportunities for First Industrial and Braemar Hotel

0.19

Correlation Coefficient

First Industrial  Braemar Hotel

Average diversification

The 3 months correlation between First and Braemar is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Braemar Hotel Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braemar Hotel Resorts 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 Braemar Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braemar Hotel Resorts has no effect on the direction of First Industrial i.e., First Industrial and Braemar Hotel go up and down completely randomly.

Pair Corralation between First Industrial and Braemar Hotel

Allowing for the 90-day total investment horizon First Industrial is expected to generate 58.3 times less return on investment than Braemar Hotel. But when comparing it to its historical volatility, First Industrial Realty is 3.14 times less risky than Braemar Hotel. It trades about 0.0 of its potential returns per unit of risk. Braemar Hotel Resorts is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  188.00  in Braemar Hotel Resorts on May 7, 2025 and sell it today you would earn a total of  30.00  from holding Braemar Hotel Resorts or generate 15.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

First Industrial Realty  vs.  Braemar Hotel Resorts

First Industrial Realty

Risk-Adjusted Performance

Weakest

Over the last 90 days First Industrial Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, First Industrial is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Braemar Hotel Resorts

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Braemar Hotel Resorts are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical indicators, Braemar Hotel reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Industrial and Braemar Hotel

The main advantage of trading using opposite First Industrial and Braemar Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial position performs unexpectedly, Braemar Hotel 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 Braemar Hotel will offset losses from the drop in Braemar Hotel's long position.

The idea behind First Industrial Realty and Braemar Hotel Resorts pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.