Correlation Between ON THE and Lindblad Expeditions

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

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

Diversification Opportunities for ON THE and Lindblad Expeditions

0.7

Correlation Coefficient

ON THE  Lindblad Expeditions

Poor diversification

The 3 months correlation between 9BP and Lindblad is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ON THE BEACH and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and ON THE 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 ON THE BEACH 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 ON THE i.e., ON THE and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between ON THE and Lindblad Expeditions

Assuming the 90 days horizon ON THE BEACH is expected to generate 0.73 times more return on investment than Lindblad Expeditions. However, ON THE BEACH is 1.37 times less risky than Lindblad Expeditions. It trades about 0.0 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about -0.07 per unit of risk. If you would invest  292.00  in ON THE BEACH on December 29, 2024 and sell it today you would lose (4.00) from holding ON THE BEACH or give up 1.37% of portfolio value over 90 days.

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

ON THE BEACH  vs.  Lindblad Expeditions Holdings

ON THE BEACH

Risk-Adjusted Performance

Very Weak

Over the last 90 days ON THE BEACH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ON THE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the 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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ON THE and Lindblad Expeditions

The main advantage of trading using opposite ON THE and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON THE 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 ON THE BEACH 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.