Correlation Between First Industrial and Jones Lang

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

Diversification Opportunities for First Industrial and Jones Lang

0.41

Correlation Coefficient

First Industrial  Jones Lang

Very weak diversification

The 3 months correlation between First and Jones is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Jones Lang LaSalle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jones Lang LaSalle 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 Jones Lang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jones Lang LaSalle has no effect on the direction of First Industrial i.e., First Industrial and Jones Lang go up and down completely randomly.

Pair Corralation between First Industrial and Jones Lang

Allowing for the 90-day total investment horizon First Industrial Realty is expected to generate 0.6 times more return on investment than Jones Lang. However, First Industrial Realty is 1.66 times less risky than Jones Lang. It trades about 0.09 of its potential returns per unit of risk. Jones Lang LaSalle is currently generating about 0.02 per unit of risk. If you would invest  5,066  in First Industrial Realty on December 26, 2024 and sell it today you would earn a total of  375.00  from holding First Industrial Realty or generate 7.4% return on investment over 90 days.

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

First Industrial Realty  vs.  Jones Lang LaSalle

First Industrial Realty

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in First Industrial Realty are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, First Industrial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Jones Lang LaSalle

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jones Lang LaSalle are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Jones Lang is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with First Industrial and Jones Lang

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

The idea behind First Industrial Realty and Jones Lang LaSalle 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.