Correlation Between TRAINLINE PLC and Lindblad Expeditions

Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and Lindblad Expeditions 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 TRAINLINE PLC and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TRAINLINE PLC LS and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on TRAINLINE PLC and Lindblad Expeditions 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 TRAINLINE PLC with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Lindblad Expeditions.

Diversification Opportunities for TRAINLINE PLC and Lindblad Expeditions

0.07

Correlation Coefficient

TRAINLINE PLC  Lindblad Expeditions

Significant diversification

The 3 months correlation between TRAINLINE and Lindblad is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with Lindblad Expeditions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindblad Expeditions has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between TRAINLINE PLC and Lindblad Expeditions

Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to under-perform the Lindblad Expeditions. But the stock apears to be less risky and, when comparing its historical volatility, TRAINLINE PLC LS is 1.17 times less risky than Lindblad Expeditions. The stock trades about -0.14 of its potential returns per unit of risk. The Lindblad Expeditions Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,180  in Lindblad Expeditions Holdings on November 29, 2024 and sell it today you would lose (150.00) from holding Lindblad Expeditions Holdings or give up 12.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

TRAINLINE PLC LS  vs.  Lindblad Expeditions Holdings

TRAINLINE PLC LS

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRAINLINE PLC LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Lindblad Expeditions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lindblad Expeditions Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with TRAINLINE PLC and Lindblad Expeditions

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

The idea behind TRAINLINE PLC LS and Lindblad Expeditions Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.