Correlation Between LandBridge Company and First Industrial

Can any of the company-specific risk be diversified away by investing in both LandBridge Company and First Industrial 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 LandBridge Company and First Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LandBridge Company LLC and First Industrial Realty, you can compare the effects of market volatilities on LandBridge Company and First Industrial 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 LandBridge Company with a short position of First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LandBridge Company and First Industrial.

Diversification Opportunities for LandBridge Company and First Industrial

0.03

Correlation Coefficient

LandBridge Company  First Industrial

Significant diversification

The 3 months correlation between LandBridge and First is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding LandBridge Company LLC and First Industrial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Industrial Realty and LandBridge Company 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 LandBridge Company LLC are associated (or correlated) with First Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Industrial Realty has no effect on the direction of LandBridge Company i.e., LandBridge Company and First Industrial go up and down completely randomly.

Pair Corralation between LandBridge Company and First Industrial

Allowing for the 90-day total investment horizon LandBridge Company LLC is expected to generate 3.79 times more return on investment than First Industrial. However, LandBridge Company is 3.79 times more volatile than First Industrial Realty. It trades about 0.08 of its potential returns per unit of risk. First Industrial Realty is currently generating about 0.11 per unit of risk. If you would invest  6,511  in LandBridge Company LLC on December 28, 2024 and sell it today you would earn a total of  1,115  from holding LandBridge Company LLC or generate 17.12% return on investment over 90 days.

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

LandBridge Company LLC  vs.  First Industrial Realty

LandBridge Company

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LandBridge Company LLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, LandBridge Company sustained solid returns over the last few months and may actually be approaching a breakup point.

First Industrial Realty

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Industrial Realty are ranked lower than 9 (%) 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.

Pair Trading with LandBridge Company and First Industrial

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

The idea behind LandBridge Company LLC and First Industrial Realty 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.