Correlation Between Lindblad Expeditions and Booking Holdings

Can any of the company-specific risk be diversified away by investing in both Lindblad Expeditions and Booking Holdings 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 Booking Holdings 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 Booking Holdings, you can compare the effects of market volatilities on Lindblad Expeditions and Booking Holdings 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 Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindblad Expeditions and Booking Holdings.

Diversification Opportunities for Lindblad Expeditions and Booking Holdings

0.79

Correlation Coefficient

Lindblad Expeditions  Booking Holdings

Poor diversification

The 3 months correlation between Lindblad and Booking is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings 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 Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Booking Holdings go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Booking Holdings

Given the investment horizon of 90 days Lindblad Expeditions is expected to generate 1.48 times less return on investment than Booking Holdings. In addition to that, Lindblad Expeditions is 2.59 times more volatile than Booking Holdings. It trades about 0.03 of its total potential returns per unit of risk. Booking Holdings is currently generating about 0.1 per unit of volatility. If you would invest  240,174  in Booking Holdings on October 3, 2024 and sell it today you would earn a total of  256,668  from holding Booking Holdings or generate 106.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Lindblad Expeditions Holdings  vs.  Booking Holdings

Lindblad Expeditions

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 9 (%) 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.

Booking Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Booking Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Booking Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lindblad Expeditions and Booking Holdings

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

The idea behind Lindblad Expeditions Holdings and Booking 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.