Correlation Between First American and Lind Capital
Can any of the company-specific risk be diversified away by investing in both First American and Lind Capital 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 First American and Lind Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Funds and Lind Capital Partners, you can compare the effects of market volatilities on First American and Lind Capital 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 First American with a short position of Lind Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Lind Capital.
Diversification Opportunities for First American and Lind Capital
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Lind is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding First American Funds and Lind Capital Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lind Capital Partners and First American 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 First American Funds are associated (or correlated) with Lind Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lind Capital Partners has no effect on the direction of First American i.e., First American and Lind Capital go up and down completely randomly.
Pair Corralation between First American and Lind Capital
Assuming the 90 days horizon First American Funds is expected to generate 0.39 times more return on investment than Lind Capital. However, First American Funds is 2.55 times less risky than Lind Capital. It trades about 0.11 of its potential returns per unit of risk. Lind Capital Partners is currently generating about 0.03 per unit of risk. If you would invest 99.00 in First American Funds on September 4, 2024 and sell it today you would earn a total of 1.00 from holding First American Funds or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First American Funds vs. Lind Capital Partners
Performance |
| Timeline |
| First American Funds |
| Lind Capital Partners |
First American and Lind Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Lind Capital
The main advantage of trading using opposite First American and Lind Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Lind Capital 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 Lind Capital will offset losses from the drop in Lind Capital's long position.| First American vs. T Rowe Price | First American vs. T Rowe Price | First American vs. Jp Morgan Smartretirement | First American vs. T Rowe Price |
| Lind Capital vs. Vanguard Total Stock | Lind Capital vs. Vanguard 500 Index | Lind Capital vs. Vanguard Total Stock | Lind Capital vs. Vanguard Total Stock |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |