Correlation Between Ladenburg Thalmann and Great Ajax

Can any of the company-specific risk be diversified away by investing in both Ladenburg Thalmann and Great Ajax 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 Ladenburg Thalmann and Great Ajax into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ladenburg Thalmann Financial and Great Ajax Corp, you can compare the effects of market volatilities on Ladenburg Thalmann and Great Ajax 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 Ladenburg Thalmann with a short position of Great Ajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladenburg Thalmann and Great Ajax.

Diversification Opportunities for Ladenburg Thalmann and Great Ajax

0.65

Correlation Coefficient

Ladenburg Thalmann  Great Ajax

Poor diversification

The 3 months correlation between Ladenburg and Great is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ladenburg Thalmann Financial and Great Ajax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Ajax Corp and Ladenburg Thalmann 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 Ladenburg Thalmann Financial are associated (or correlated) with Great Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Ajax Corp has no effect on the direction of Ladenburg Thalmann i.e., Ladenburg Thalmann and Great Ajax go up and down completely randomly.

Pair Corralation between Ladenburg Thalmann and Great Ajax

If you would invest  2,460  in Great Ajax Corp on September 18, 2024 and sell it today you would earn a total of  0.00  from holding Great Ajax Corp or generate 0.0% return on investment over 90 days.

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

Ladenburg Thalmann Financial  vs.  Great Ajax Corp

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.

Great Ajax Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Great Ajax Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Great Ajax is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ladenburg Thalmann and Great Ajax

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

The idea behind Ladenburg Thalmann Financial and Great Ajax Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.