Correlation Between Lind Capital and Ridgeworth Ceredex

Can any of the company-specific risk be diversified away by investing in both Lind Capital and Ridgeworth Ceredex 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 Ridgeworth Ceredex 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 Ridgeworth Ceredex Small, you can compare the effects of market volatilities on Lind Capital and Ridgeworth Ceredex 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 Ridgeworth Ceredex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lind Capital and Ridgeworth Ceredex.

Diversification Opportunities for Lind Capital and Ridgeworth Ceredex

0.66

Correlation Coefficient

Lind Capital  Ridgeworth Ceredex

Poor diversification

The 3 months correlation between Lind and Ridgeworth is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lind Capital Partners and Ridgeworth Ceredex Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgeworth Ceredex Small 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 Ridgeworth Ceredex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgeworth Ceredex Small has no effect on the direction of Lind Capital i.e., Lind Capital and Ridgeworth Ceredex go up and down completely randomly.

Pair Corralation between Lind Capital and Ridgeworth Ceredex

Assuming the 90 days horizon Lind Capital Partners is expected to generate 0.22 times more return on investment than Ridgeworth Ceredex. However, Lind Capital Partners is 4.55 times less risky than Ridgeworth Ceredex. It trades about 0.09 of its potential returns per unit of risk. Ridgeworth Ceredex Small is currently generating about 0.0 per unit of risk. If you would invest  784.00  in Lind Capital Partners on December 2, 2024 and sell it today you would earn a total of  104.00  from holding Lind Capital Partners or generate 13.27% return on investment over 90 days.

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

Lind Capital Partners  vs.  Ridgeworth Ceredex Small

Lind Capital Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lind Capital Partners has generated negative risk-adjusted returns adding no value to fund investors. 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.

Ridgeworth Ceredex Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ridgeworth Ceredex Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Lind Capital and Ridgeworth Ceredex

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

The idea behind Lind Capital Partners and Ridgeworth Ceredex Small 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.