Correlation Between Lindblad Expeditions and Forsys Metals

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

Diversification Opportunities for Lindblad Expeditions and Forsys Metals

0.22

Correlation Coefficient

Lindblad Expeditions  Forsys Metals

Modest diversification

The 3 months correlation between Lindblad and Forsys is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys Metals 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 Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Forsys Metals go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Forsys Metals

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to under-perform the Forsys Metals. But the stock apears to be less risky and, when comparing its historical volatility, Lindblad Expeditions Holdings is 1.98 times less risky than Forsys Metals. The stock trades about -0.27 of its potential returns per unit of risk. The Forsys Metals Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Forsys Metals Corp on December 10, 2024 and sell it today you would lose (3.00) from holding Forsys Metals Corp or give up 9.09% of portfolio value over 90 days.

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

Lindblad Expeditions Holdings  vs.  Forsys Metals Corp

Lindblad Expeditions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lindblad Expeditions Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Forsys Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forsys Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Lindblad Expeditions and Forsys Metals

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

The idea behind Lindblad Expeditions Holdings and Forsys Metals 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.