Correlation Between Charter Communications and Lindblad Expeditions

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

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

Diversification Opportunities for Charter Communications and Lindblad Expeditions

-0.06

Correlation Coefficient

Charter Communications  Lindblad Expeditions

Good diversification

The 3 months correlation between Charter and Lindblad is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Charter Communications 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 Charter Communications 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 Charter Communications i.e., Charter Communications and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Charter Communications and Lindblad Expeditions

Assuming the 90 days trading horizon Charter Communications is expected to generate 0.55 times more return on investment than Lindblad Expeditions. However, Charter Communications is 1.81 times less risky than Lindblad Expeditions. It trades about -0.02 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about -0.12 per unit of risk. If you would invest  33,565  in Charter Communications on December 22, 2024 and sell it today you would lose (1,010) from holding Charter Communications or give up 3.01% of portfolio value over 90 days.

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

Charter Communications  vs.  Lindblad Expeditions Holdings

Charter Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Charter Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Charter Communications is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 uncertain 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 Charter Communications and Lindblad Expeditions

The main advantage of trading using opposite Charter Communications and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications 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 Charter Communications 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .