Correlation Between Lind Capital and Nuveen Minnesota

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

By analyzing existing cross correlation between Lind Capital Partners and Nuveen Minnesota Municipal, you can compare the effects of market volatilities on Lind Capital and Nuveen Minnesota 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 Lind Capital with a short position of Nuveen Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lind Capital and Nuveen Minnesota.

Diversification Opportunities for Lind Capital and Nuveen Minnesota

0.88

Correlation Coefficient

Lind Capital  Nuveen Minnesota

Very poor diversification

The 3 months correlation between Lind and Nuveen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lind Capital Partners and Nuveen Minnesota Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Minnesota Mun and Lind Capital 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 Lind Capital Partners are associated (or correlated) with Nuveen Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Minnesota Mun has no effect on the direction of Lind Capital i.e., Lind Capital and Nuveen Minnesota go up and down completely randomly.

Pair Corralation between Lind Capital and Nuveen Minnesota

Assuming the 90 days horizon Lind Capital Partners is expected to generate 1.21 times more return on investment than Nuveen Minnesota. However, Lind Capital is 1.21 times more volatile than Nuveen Minnesota Municipal. It trades about 0.09 of its potential returns per unit of risk. Nuveen Minnesota Municipal is currently generating about 0.08 per unit of risk. If you would invest  796.00  in Lind Capital Partners on September 12, 2024 and sell it today you would earn a total of  106.00  from holding Lind Capital Partners or generate 13.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Lind Capital Partners  vs.  Nuveen Minnesota Municipal

Lind Capital Partners

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lind Capital Partners are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Lind Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Minnesota Mun

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Minnesota Municipal are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen Minnesota is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lind Capital and Nuveen Minnesota

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

The idea behind Lind Capital Partners and Nuveen Minnesota Municipal 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.