Correlation Between Lindblad Expeditions and Zapata Computing

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

Diversification Opportunities for Lindblad Expeditions and Zapata Computing

-0.68

Correlation Coefficient

Lindblad Expeditions  Zapata Computing

Excellent diversification

The 3 months correlation between Lindblad and Zapata is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Zapata Computing Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapata Computing Holdings 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 Zapata Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapata Computing Holdings has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Zapata Computing go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Zapata Computing

Given the investment horizon of 90 days Lindblad Expeditions is expected to generate 36.92 times less return on investment than Zapata Computing. But when comparing it to its historical volatility, Lindblad Expeditions Holdings is 22.5 times less risky than Zapata Computing. It trades about 0.08 of its potential returns per unit of risk. Zapata Computing Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3.99  in Zapata Computing Holdings on September 14, 2024 and sell it today you would lose (3.43) from holding Zapata Computing Holdings or give up 85.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	52.38%
Values	Daily Returns

Lindblad Expeditions Holdings  vs.  Zapata Computing Holdings

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.

Zapata Computing Holdings

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Zapata Computing Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent basic indicators, Zapata Computing showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lindblad Expeditions and Zapata Computing

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

The idea behind Lindblad Expeditions Holdings and Zapata Computing Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.