Correlation Between Smart Share and Lindblad Expeditions

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Can any of the company-specific risk be diversified away by investing in both Smart Share 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 Smart Share and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smart Share Global and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on Smart Share 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 Smart Share with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Share and Lindblad Expeditions.

Diversification Opportunities for Smart Share and Lindblad Expeditions

SmartLindbladDiversified AwaySmartLindbladDiversified Away100%
-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between Smart and Lindblad is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Smart Share Global and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Smart Share 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 Smart Share Global 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 Smart Share i.e., Smart Share and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Smart Share and Lindblad Expeditions

Allowing for the 90-day total investment horizon Smart Share Global is expected to generate 1.22 times more return on investment than Lindblad Expeditions. However, Smart Share is 1.22 times more volatile than Lindblad Expeditions Holdings. It trades about 0.1 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about 0.09 per unit of risk. If you would invest  76.00  in Smart Share Global on October 14, 2024 and sell it today you would earn a total of  23.00  from holding Smart Share Global or generate 30.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Smart Share Global  vs.  Lindblad Expeditions Holdings

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -1001020304050
JavaScript chart by amCharts 3.21.15EM LIND
       Timeline  
Smart Share Global 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Smart Share Global are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, Smart Share displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.60.70.80.91
Lindblad Expeditions 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 6 (%) 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1011121314

Smart Share and Lindblad Expeditions Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-16.89-12.65-8.41-4.170.0744.378.8113.2517.69 0.0120.0140.0160.018
JavaScript chart by amCharts 3.21.15EM LIND
       Returns  

Pair Trading with Smart Share and Lindblad Expeditions

The main advantage of trading using opposite Smart Share and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Share 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 Smart Share Global 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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