Correlation Between CNFinance Holdings and LM Funding
Can any of the company-specific risk be diversified away by investing in both CNFinance Holdings and LM Funding 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 CNFinance Holdings and LM Funding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNFinance Holdings and LM Funding America, you can compare the effects of market volatilities on CNFinance Holdings and LM Funding 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 CNFinance Holdings with a short position of LM Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNFinance Holdings and LM Funding.
Diversification Opportunities for CNFinance Holdings and LM Funding
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CNFinance and LMFA is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CNFinance Holdings and LM Funding America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LM Funding America and CNFinance Holdings 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 CNFinance Holdings are associated (or correlated) with LM Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LM Funding America has no effect on the direction of CNFinance Holdings i.e., CNFinance Holdings and LM Funding go up and down completely randomly.
Pair Corralation between CNFinance Holdings and LM Funding
Considering the 90-day investment horizon CNFinance Holdings is expected to generate 1.77 times more return on investment than LM Funding. However, CNFinance Holdings is 1.77 times more volatile than LM Funding America. It trades about 0.05 of its potential returns per unit of risk. LM Funding America is currently generating about -0.13 per unit of risk. If you would invest 530.00 in CNFinance Holdings on August 17, 2025 and sell it today you would lose (15.00) from holding CNFinance Holdings or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNFinance Holdings vs. LM Funding America
Performance |
| Timeline |
| CNFinance Holdings |
| LM Funding America |
CNFinance Holdings and LM Funding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNFinance Holdings and LM Funding
The main advantage of trading using opposite CNFinance Holdings and LM Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNFinance Holdings position performs unexpectedly, LM Funding 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 LM Funding will offset losses from the drop in LM Funding's long position.| CNFinance Holdings vs. LM Funding America | CNFinance Holdings vs. Carver Bancorp | CNFinance Holdings vs. Abits Group | CNFinance Holdings vs. Berto Acquisition Corp |
| LM Funding vs. Nisun International Enterprise | LM Funding vs. Abits Group | LM Funding vs. Archimedes Tech SPAC | LM Funding vs. Presurance Holdings, |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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