Correlation Between Allient and Lindblad Expeditions

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

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

Diversification Opportunities for Allient and Lindblad Expeditions

0.91

Correlation Coefficient

Allient  Lindblad Expeditions

Almost no diversification

The 3 months correlation between Allient and Lindblad is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Allient 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 Allient 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 Allient i.e., Allient and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Allient and Lindblad Expeditions

Given the investment horizon of 90 days Allient is expected to generate 0.66 times more return on investment than Lindblad Expeditions. However, Allient is 1.5 times less risky than Lindblad Expeditions. It trades about -0.16 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about -0.2 per unit of risk. If you would invest  2,640  in Allient on October 5, 2024 and sell it today you would lose (191.00) from holding Allient or give up 7.23% of portfolio value over 90 days.

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

Allient  vs.  Lindblad Expeditions Holdings

Allient

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lindblad Expeditions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Lindblad Expeditions exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allient and Lindblad Expeditions

The main advantage of trading using opposite Allient and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient 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 Allient 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.