Correlation Between Nisun International and LM Funding

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

By analyzing existing cross correlation between Nisun International Enterprise and LM Funding America, you can compare the effects of market volatilities on Nisun International 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 Nisun International with a short position of LM Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nisun International and LM Funding.

Diversification Opportunities for Nisun International and LM Funding

0.06

Correlation Coefficient

Nisun International  LM Funding

Significant diversification

The 3 months correlation between Nisun and LMFA is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nisun International Enterprise 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 Nisun International 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 Nisun International Enterprise 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 Nisun International i.e., Nisun International and LM Funding go up and down completely randomly.

Pair Corralation between Nisun International and LM Funding

Given the investment horizon of 90 days Nisun International Enterprise is expected to generate 1.51 times more return on investment than LM Funding. However, Nisun International is 1.51 times more volatile than LM Funding America. It trades about 0.0 of its potential returns per unit of risk. LM Funding America is currently generating about -0.23 per unit of risk. If you would invest  837.00  in Nisun International Enterprise on November 28, 2024 and sell it today you would lose (92.00) from holding Nisun International Enterprise or give up 10.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Nisun International Enterprise  vs.  LM Funding America

Nisun International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nisun International Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Nisun International is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

LM Funding America

Risk-Adjusted Performance

Very Weak

Over the last 90 days LM Funding America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Nisun International and LM Funding

The main advantage of trading using opposite Nisun International and LM Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nisun International 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.

The idea behind Nisun International Enterprise and LM Funding America 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.