Correlation Between First Industrial and Belpointe PREP

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

Diversification Opportunities for First Industrial and Belpointe PREP

-0.56

Correlation Coefficient

First Industrial  Belpointe PREP

Excellent diversification

The 3 months correlation between First and Belpointe is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Belpointe PREP LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belpointe PREP LLC 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 Belpointe PREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belpointe PREP LLC has no effect on the direction of First Industrial i.e., First Industrial and Belpointe PREP go up and down completely randomly.

Pair Corralation between First Industrial and Belpointe PREP

Allowing for the 90-day total investment horizon First Industrial Realty is expected to under-perform the Belpointe PREP. But the stock apears to be less risky and, when comparing its historical volatility, First Industrial Realty is 1.58 times less risky than Belpointe PREP. The stock trades about -0.2 of its potential returns per unit of risk. The Belpointe PREP LLC is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  7,032  in Belpointe PREP LLC on September 23, 2024 and sell it today you would earn a total of  868.00  from holding Belpointe PREP LLC or generate 12.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

First Industrial Realty  vs.  Belpointe PREP LLC

First Industrial Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Industrial Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Belpointe PREP LLC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Belpointe PREP LLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Belpointe PREP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with First Industrial and Belpointe PREP

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

The idea behind First Industrial Realty and Belpointe PREP LLC 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.