Correlation Between First Industrial and Ladenburg Thalmann

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

Diversification Opportunities for First Industrial and Ladenburg Thalmann

-0.54

Correlation Coefficient

First Industrial  Ladenburg Thalmann

Excellent diversification

The 3 months correlation between First and Ladenburg is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann 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 Ladenburg Thalmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Thalmann has no effect on the direction of First Industrial i.e., First Industrial and Ladenburg Thalmann go up and down completely randomly.

Pair Corralation between First Industrial and Ladenburg Thalmann

If you would invest  1,725  in Ladenburg Thalmann Financial on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Ladenburg Thalmann Financial or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.64%
Values	Daily Returns

First Industrial Realty  vs.  Ladenburg Thalmann Financial

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 weak 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.

Ladenburg Thalmann

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ladenburg Thalmann Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ladenburg Thalmann is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with First Industrial and Ladenburg Thalmann

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

The idea behind First Industrial Realty and Ladenburg Thalmann Financial 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.