Correlation Between Lindblad Expeditions and Aeye

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

Diversification Opportunities for Lindblad Expeditions and Aeye

-0.32

Correlation Coefficient

Lindblad Expeditions  Aeye

Very good diversification

The 3 months correlation between Lindblad and Aeye is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc 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 Aeye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeye Inc has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Aeye go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Aeye

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to under-perform the Aeye. But the stock apears to be less risky and, when comparing its historical volatility, Lindblad Expeditions Holdings is 4.04 times less risky than Aeye. The stock trades about -0.07 of its potential returns per unit of risk. The Aeye Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  113.00  in Aeye Inc on November 29, 2024 and sell it today you would lose (52.01) from holding Aeye Inc or give up 46.03% of portfolio value over 90 days.

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

Lindblad Expeditions Holdings  vs.  Aeye Inc

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Aeye Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aeye Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Lindblad Expeditions and Aeye

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

The idea behind Lindblad Expeditions Holdings and Aeye Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.