Correlation Between Lindblad Expeditions and Ares Management

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

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

Diversification Opportunities for Lindblad Expeditions and Ares Management

-0.26

Correlation Coefficient

Lindblad Expeditions  Ares Management

Very good diversification

The 3 months correlation between Lindblad and Ares is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Ares Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management Corp and Lindblad Expeditions 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 Lindblad Expeditions Holdings are associated (or correlated) with Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management Corp has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Ares Management go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Ares Management

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to generate 3.42 times more return on investment than Ares Management. However, Lindblad Expeditions is 3.42 times more volatile than Ares Management Corp. It trades about 0.08 of its potential returns per unit of risk. Ares Management Corp is currently generating about 0.13 per unit of risk. If you would invest  962.00  in Lindblad Expeditions Holdings on October 24, 2024 and sell it today you would earn a total of  183.00  from holding Lindblad Expeditions Holdings or generate 19.02% return on investment over 90 days.

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

Lindblad Expeditions Holdings  vs.  Ares Management Corp

Lindblad Expeditions

Risk-Adjusted Performance

6 of 100

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.

Ares Management Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ares Management Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Ares Management may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Lindblad Expeditions and Ares Management

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

The idea behind Lindblad Expeditions Holdings and Ares Management Corp 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.