Correlation Between MakeMyTrip and Lindblad Expeditions

Can any of the company-specific risk be diversified away by investing in both MakeMyTrip and Lindblad Expeditions 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 MakeMyTrip and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MakeMyTrip Limited and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on MakeMyTrip and Lindblad Expeditions 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 MakeMyTrip with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of MakeMyTrip and Lindblad Expeditions.

Diversification Opportunities for MakeMyTrip and Lindblad Expeditions

0.14

Correlation Coefficient

MakeMyTrip  Lindblad Expeditions

Average diversification

The 3 months correlation between MakeMyTrip and Lindblad is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding MakeMyTrip Limited and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and MakeMyTrip 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 MakeMyTrip Limited are associated (or correlated) with Lindblad Expeditions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindblad Expeditions has no effect on the direction of MakeMyTrip i.e., MakeMyTrip and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between MakeMyTrip and Lindblad Expeditions

Assuming the 90 days horizon MakeMyTrip Limited is expected to under-perform the Lindblad Expeditions. But the stock apears to be less risky and, when comparing its historical volatility, MakeMyTrip Limited is 1.15 times less risky than Lindblad Expeditions. The stock trades about -0.1 of its potential returns per unit of risk. The Lindblad Expeditions Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,180  in Lindblad Expeditions Holdings on November 29, 2024 and sell it today you would lose (150.00) from holding Lindblad Expeditions Holdings or give up 12.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

MakeMyTrip Limited  vs.  Lindblad Expeditions Holdings

MakeMyTrip Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days MakeMyTrip Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with MakeMyTrip and Lindblad Expeditions

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

The idea behind MakeMyTrip Limited and Lindblad Expeditions 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.