Correlation Between Lindblad Expeditions and Li Auto

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

Diversification Opportunities for Lindblad Expeditions and Li Auto

-0.2

Correlation Coefficient

Lindblad Expeditions  Li Auto

Good diversification

The 3 months correlation between Lindblad and Li Auto is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Li Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Auto 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 Li Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Auto has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Li Auto go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Li Auto

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to generate 0.97 times more return on investment than Li Auto. However, Lindblad Expeditions Holdings is 1.03 times less risky than Li Auto. It trades about 0.14 of its potential returns per unit of risk. Li Auto is currently generating about 0.1 per unit of risk. If you would invest  954.00  in Lindblad Expeditions Holdings on September 3, 2024 and sell it today you would earn a total of  372.00  from holding Lindblad Expeditions Holdings or generate 38.99% return on investment over 90 days.

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

Lindblad Expeditions Holdings  vs.  Li Auto

Lindblad Expeditions

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 10 (%) 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.

Li Auto

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Li Auto are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Li Auto demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lindblad Expeditions and Li Auto

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

The idea behind Lindblad Expeditions Holdings and Li Auto 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 Global Correlations module to find global opportunities by holding instruments from different markets.