Correlation Between Lindblad Expeditions and Dominos Pizza

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

Diversification Opportunities for Lindblad Expeditions and Dominos Pizza

0.79

Correlation Coefficient

Lindblad Expeditions  Dominos Pizza

Poor diversification

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

Pair Corralation between Lindblad Expeditions and Dominos Pizza

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to under-perform the Dominos Pizza. In addition to that, Lindblad Expeditions is 2.22 times more volatile than Dominos Pizza. It trades about -0.15 of its total potential returns per unit of risk. Dominos Pizza is currently generating about 0.03 per unit of volatility. If you would invest  44,345  in Dominos Pizza on September 18, 2024 and sell it today you would earn a total of  329.00  from holding Dominos Pizza or generate 0.74% return on investment over 90 days.

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

Lindblad Expeditions Holdings  vs.  Dominos Pizza

Lindblad Expeditions

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 4 (%) 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.

Dominos Pizza

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dominos Pizza are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Dominos Pizza may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lindblad Expeditions and Dominos Pizza

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

The idea behind Lindblad Expeditions Holdings and Dominos Pizza 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.