Correlation Between Lindblad Expeditions and Eltek

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

Diversification Opportunities for Lindblad Expeditions and Eltek

0.52

Correlation Coefficient

Lindblad Expeditions  Eltek

Very weak diversification

The 3 months correlation between Lindblad and Eltek is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek 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 Eltek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eltek has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Eltek go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Eltek

Given the investment horizon of 90 days Lindblad Expeditions is expected to generate 2.81 times less return on investment than Eltek. But when comparing it to its historical volatility, Lindblad Expeditions Holdings is 1.13 times less risky than Eltek. It trades about 0.03 of its potential returns per unit of risk. Eltek is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  444.00  in Eltek on October 20, 2024 and sell it today you would earn a total of  663.00  from holding Eltek or generate 149.32% return on investment over 90 days.

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

Lindblad Expeditions Holdings  vs.  Eltek

Lindblad Expeditions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 8 (%) 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.

Eltek

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Eltek may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Lindblad Expeditions and Eltek

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

The idea behind Lindblad Expeditions Holdings and Eltek 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.