Correlation Between Lindblad Expeditions and Gap,

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

Diversification Opportunities for Lindblad Expeditions and Gap,

0.6

Correlation Coefficient

Lindblad Expeditions  Gap,

Poor diversification

The 3 months correlation between Lindblad and Gap, is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, 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 Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Gap, go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Gap,

Given the investment horizon of 90 days Lindblad Expeditions is expected to generate 2.03 times less return on investment than Gap,. In addition to that, Lindblad Expeditions is 1.2 times more volatile than The Gap,. It trades about 0.02 of its total potential returns per unit of risk. The Gap, is currently generating about 0.06 per unit of volatility. If you would invest  1,200  in The Gap, on October 4, 2024 and sell it today you would earn a total of  1,161  from holding The Gap, or generate 96.75% 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.  The Gap,

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.

Gap,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lindblad Expeditions and Gap,

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

The idea behind Lindblad Expeditions Holdings and The Gap, 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.