Correlation Between Growth Income and Lind Capital
Can any of the company-specific risk be diversified away by investing in both Growth Income 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 Growth Income and Lind Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Income Fund and Lind Capital Partners, you can compare the effects of market volatilities on Growth Income 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 Growth Income with a short position of Lind Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Income and Lind Capital.
Diversification Opportunities for Growth Income and Lind Capital
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and Lind is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Growth Income Fund 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 Growth Income 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 Growth Income Fund 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 Growth Income i.e., Growth Income and Lind Capital go up and down completely randomly.
Pair Corralation between Growth Income and Lind Capital
Assuming the 90 days horizon Growth Income Fund is expected to generate 2.37 times more return on investment than Lind Capital. However, Growth Income is 2.37 times more volatile than Lind Capital Partners. It trades about 0.18 of its potential returns per unit of risk. Lind Capital Partners is currently generating about 0.1 per unit of risk. If you would invest 2,699 in Growth Income Fund on September 12, 2024 and sell it today you would earn a total of 190.00 from holding Growth Income Fund or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Income Fund vs. Lind Capital Partners
Performance |
| Timeline |
| Growth Income |
| Lind Capital Partners |
Growth Income and Lind Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Income and Lind Capital
The main advantage of trading using opposite Growth Income and Lind Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Income 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.| Growth Income vs. Payden High Income | Growth Income vs. T Rowe Price | Growth Income vs. Guggenheim High Yield | Growth Income vs. Buffalo High Yield |
| Lind Capital vs. Blackrock Financial Institutions | Lind Capital vs. Prudential Jennison Financial | Lind Capital vs. John Hancock Financial | Lind Capital vs. 1919 Financial Services |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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