Correlation Between Tokyo Electron and Lument Finance
Can any of the company-specific risk be diversified away by investing in both Tokyo Electron 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 Tokyo Electron and Lument Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokyo Electron and Lument Finance Trust, you can compare the effects of market volatilities on Tokyo Electron 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 Tokyo Electron with a short position of Lument Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokyo Electron and Lument Finance.
Diversification Opportunities for Tokyo Electron and Lument Finance
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tokyo and Lument is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tokyo Electron 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 Tokyo Electron 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 Tokyo Electron 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 Tokyo Electron i.e., Tokyo Electron and Lument Finance go up and down completely randomly.
Pair Corralation between Tokyo Electron and Lument Finance
Assuming the 90 days horizon Tokyo Electron is expected to generate 1.87 times more return on investment than Lument Finance. However, Tokyo Electron is 1.87 times more volatile than Lument Finance Trust. It trades about 0.2 of its potential returns per unit of risk. Lument Finance Trust is currently generating about -0.23 per unit of risk. If you would invest 13,949 in Tokyo Electron on August 14, 2025 and sell it today you would earn a total of 7,718 from holding Tokyo Electron or generate 55.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tokyo Electron vs. Lument Finance Trust
Performance |
| Timeline |
| Tokyo Electron |
| Lument Finance Trust |
Tokyo Electron and Lument Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokyo Electron and Lument Finance
The main advantage of trading using opposite Tokyo Electron and Lument Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokyo Electron 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.| Tokyo Electron vs. Shin Etsu Chemical Co | Tokyo Electron vs. Kingboard Chemical Holdings | Tokyo Electron vs. Fernhill Beverage | Tokyo Electron vs. Chandra Asri Petrochemical |
| Lument Finance vs. Cherry Hill Mortgage | Lument Finance vs. Manhattan Bridge Capital | Lument Finance vs. AFC Gamma | Lument Finance vs. Global Medical REIT |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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