Correlation Between FrontView REIT, and Lennar

Can any of the company-specific risk be diversified away by investing in both FrontView REIT, and Lennar 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 FrontView REIT, and Lennar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FrontView REIT, and Lennar, you can compare the effects of market volatilities on FrontView REIT, and Lennar 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 FrontView REIT, with a short position of Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and Lennar.

Diversification Opportunities for FrontView REIT, and Lennar

0.49

Correlation Coefficient

FrontView REIT,  Lennar

Very weak diversification

The 3 months correlation between FrontView and Lennar is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar and FrontView REIT, 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 FrontView REIT, are associated (or correlated) with Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Lennar go up and down completely randomly.

Pair Corralation between FrontView REIT, and Lennar

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Lennar. But the stock apears to be less risky and, when comparing its historical volatility, FrontView REIT, is 1.15 times less risky than Lennar. The stock trades about -0.04 of its potential returns per unit of risk. The Lennar is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  261,001  in Lennar on October 7, 2024 and sell it today you would earn a total of  59,999  from holding Lennar or generate 22.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	27.24%
Values	Daily Returns

FrontView REIT,  vs.  Lennar

FrontView REIT,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Lennar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lennar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with FrontView REIT, and Lennar

The main advantage of trading using opposite FrontView REIT, and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FrontView REIT, position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar's long position.

The idea behind FrontView REIT, and Lennar 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.