Correlation Between Lument Finance and Apollo Commercial

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Can any of the company-specific risk be diversified away by investing in both Lument Finance and Apollo Commercial 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 Apollo Commercial 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 Apollo Commercial Real, you can compare the effects of market volatilities on Lument Finance and Apollo Commercial 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 Apollo Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lument Finance and Apollo Commercial.

Diversification Opportunities for Lument Finance and Apollo Commercial

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Lument and Apollo is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lument Finance Trust and Apollo Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Commercial Real 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 Apollo Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Commercial Real has no effect on the direction of Lument Finance i.e., Lument Finance and Apollo Commercial go up and down completely randomly.

Pair Corralation between Lument Finance and Apollo Commercial

Considering the 90-day investment horizon Lument Finance is expected to generate 3.92 times less return on investment than Apollo Commercial. In addition to that, Lument Finance is 2.85 times more volatile than Apollo Commercial Real. It trades about 0.02 of its total potential returns per unit of risk. Apollo Commercial Real is currently generating about 0.22 per unit of volatility. If you would invest  874.00  in Apollo Commercial Real on August 24, 2024 and sell it today you would earn a total of  46.00  from holding Apollo Commercial Real or generate 5.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

Lument Finance Trust  vs.  Apollo Commercial Real

 Performance 
       Timeline  
Lument Finance Trust 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Lument Finance Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Lument Finance may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Apollo Commercial Real 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Apollo Commercial Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Lument Finance and Apollo Commercial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lument Finance and Apollo Commercial

The main advantage of trading using opposite Lument Finance and Apollo Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lument Finance position performs unexpectedly, Apollo Commercial 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 Apollo Commercial will offset losses from the drop in Apollo Commercial's long position.
The idea behind Lument Finance Trust and Apollo Commercial Real 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.
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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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