Correlation Between Lindblad Expeditions and DOMTAR

Can any of the company-specific risk be diversified away by investing in both Lindblad Expeditions and DOMTAR 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 DOMTAR 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 DOMTAR P 625, you can compare the effects of market volatilities on Lindblad Expeditions and DOMTAR 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 DOMTAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindblad Expeditions and DOMTAR.

Diversification Opportunities for Lindblad Expeditions and DOMTAR

0.61

Correlation Coefficient

Lindblad Expeditions  DOMTAR

Poor diversification

The 3 months correlation between Lindblad and DOMTAR is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and DOMTAR P 625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOMTAR P 625 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 DOMTAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOMTAR P 625 has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and DOMTAR go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and DOMTAR

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to under-perform the DOMTAR. In addition to that, Lindblad Expeditions is 1.08 times more volatile than DOMTAR P 625. It trades about -0.1 of its total potential returns per unit of risk. DOMTAR P 625 is currently generating about -0.01 per unit of volatility. If you would invest  6,415  in DOMTAR P 625 on December 23, 2024 and sell it today you would lose (280.00) from holding DOMTAR P 625 or give up 4.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	85.25%
Values	Daily Returns

Lindblad Expeditions Holdings  vs.  DOMTAR P 625

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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DOMTAR P 625

Risk-Adjusted Performance

Very Weak

Over the last 90 days DOMTAR P 625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DOMTAR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lindblad Expeditions and DOMTAR

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

The idea behind Lindblad Expeditions Holdings and DOMTAR P 625 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.