Correlation Between Lindblad Expeditions and Tianjin Capital

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

Diversification Opportunities for Lindblad Expeditions and Tianjin Capital

0.77

Correlation Coefficient

Lindblad Expeditions  Tianjin Capital

Poor diversification

The 3 months correlation between Lindblad and Tianjin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Tianjin Capital go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Tianjin Capital

If you would invest  38.00  in Tianjin Capital Environmental on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Tianjin Capital Environmental or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Lindblad Expeditions Holdings  vs.  Tianjin Capital Environmental

Lindblad Expeditions

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 6 (%) 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.

Tianjin Capital Envi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Capital Environmental are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, Tianjin Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Lindblad Expeditions and Tianjin Capital

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

The idea behind Lindblad Expeditions Holdings and Tianjin Capital Environmental 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.