Correlation Between Lument Finance and Lument Finance
Can any of the company-specific risk be diversified away by investing in both Lument Finance 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 Lument Finance and Lument Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lument Finance Trust and Lument Finance Trust, you can compare the effects of market volatilities on Lument Finance 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 Lument Finance with a short position of Lument Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lument Finance and Lument Finance.
Diversification Opportunities for Lument Finance and Lument Finance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lument and Lument is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lument Finance Trust 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 Lument Finance 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 Lument Finance Trust 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 Lument Finance i.e., Lument Finance and Lument Finance go up and down completely randomly.
Pair Corralation between Lument Finance and Lument Finance
Assuming the 90 days trading horizon Lument Finance Trust is expected to generate 2.21 times more return on investment than Lument Finance. However, Lument Finance is 2.21 times more volatile than Lument Finance Trust. It trades about 0.03 of its potential returns per unit of risk. Lument Finance Trust is currently generating about 0.06 per unit of risk. If you would invest 1,975 in Lument Finance Trust on August 23, 2024 and sell it today you would earn a total of 270.00 from holding Lument Finance Trust or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.18% |
| Values | Daily Returns |
Lument Finance Trust vs. Lument Finance Trust
Performance |
| Timeline |
| Lument Finance Trust |
| Lument Finance Trust |
Lument Finance and Lument Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lument Finance and Lument Finance
The main advantage of trading using opposite Lument Finance and Lument Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lument Finance 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.| Lument Finance vs. ACRES Commercial Realty | Lument Finance vs. ACRES Commercial Realty | Lument Finance vs. KKR Real Estate | Lument Finance vs. NexPoint Real Estate |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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