Correlation Between Chicago Atlantic and Lument Finance
Can any of the company-specific risk be diversified away by investing in both Chicago Atlantic 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 Chicago Atlantic and Lument Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicago Atlantic Real and Lument Finance Trust, you can compare the effects of market volatilities on Chicago Atlantic 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 Chicago Atlantic with a short position of Lument Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Atlantic and Lument Finance.
Diversification Opportunities for Chicago Atlantic and Lument Finance
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chicago and Lument is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic Real 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 Chicago Atlantic 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 Chicago Atlantic Real 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 Chicago Atlantic i.e., Chicago Atlantic and Lument Finance go up and down completely randomly.
Pair Corralation between Chicago Atlantic and Lument Finance
Given the investment horizon of 90 days Chicago Atlantic is expected to generate 1.93 times less return on investment than Lument Finance. But when comparing it to its historical volatility, Chicago Atlantic Real is 1.6 times less risky than Lument Finance. It trades about 0.05 of its potential returns per unit of risk. Lument Finance Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 153.00 in Lument Finance Trust on August 24, 2024 and sell it today you would earn a total of 102.00 from holding Lument Finance Trust or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicago Atlantic Real vs. Lument Finance Trust
Performance |
| Timeline |
| Chicago Atlantic Real |
| Lument Finance Trust |
Chicago Atlantic and Lument Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicago Atlantic and Lument Finance
The main advantage of trading using opposite Chicago Atlantic and Lument Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic 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.| Chicago Atlantic vs. KKR Real Estate | Chicago Atlantic vs. Ellington Residential Mortgage | Chicago Atlantic vs. Claros Mortgage Trust | Chicago Atlantic vs. Great Ajax Corp |
| Lument Finance vs. Acres Commercial Realty | Lument Finance vs. AG Mortgage Investment | Lument Finance vs. Rithm Capital Corp | Lument Finance vs. Ares Commercial Real |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |