Correlation Between Great Ajax and Lument Finance
Can any of the company-specific risk be diversified away by investing in both Great Ajax and Lument Finance 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 Great Ajax and Lument Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Ajax Corp and Lument Finance Trust, you can compare the effects of market volatilities on Great Ajax and Lument Finance 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 Great Ajax with a short position of Lument Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Ajax and Lument Finance.
Diversification Opportunities for Great Ajax and Lument Finance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great and Lument is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Great Ajax Corp and Lument Finance Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lument Finance Trust and Great Ajax 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 Great Ajax Corp are associated (or correlated) with Lument Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lument Finance Trust has no effect on the direction of Great Ajax i.e., Great Ajax and Lument Finance go up and down completely randomly.
Pair Corralation between Great Ajax and Lument Finance
Considering the 90-day investment horizon Great Ajax Corp is expected to under-perform the Lument Finance. But the stock apears to be less risky and, when comparing its historical volatility, Great Ajax Corp is 2.49 times less risky than Lument Finance. The stock trades about -0.11 of its potential returns per unit of risk. The Lument Finance Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 250.00 in Lument Finance Trust on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Lument Finance Trust or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Ajax Corp vs. Lument Finance Trust
Performance |
| Timeline |
| Great Ajax Corp |
| Lument Finance Trust |
Great Ajax and Lument Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Ajax and Lument Finance
The main advantage of trading using opposite Great Ajax and Lument Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Ajax position performs unexpectedly, Lument Finance 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 Lument Finance will offset losses from the drop in Lument Finance's long position.| Great Ajax vs. Ellington Residential Mortgage | Great Ajax vs. Ares Commercial Real | Great Ajax vs. Cherry Hill Mortgage | Great Ajax vs. AGNC Investment Corp |
| Lument Finance vs. AGNC Investment Corp | Lument Finance vs. Nexpoint Real Estate | Lument Finance vs. Great Ajax Corp | Lument Finance vs. Ladder Capital Corp |
Check out your portfolio center.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.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |