Correlation Between Rivian Automotive and Lindblad Expeditions

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

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

Diversification Opportunities for Rivian Automotive and Lindblad Expeditions

-0.37

Correlation Coefficient

Rivian Automotive  Lindblad Expeditions

Very good diversification

The 3 months correlation between Rivian and Lindblad is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Rivian Automotive and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Rivian Automotive 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 Rivian Automotive 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 Rivian Automotive i.e., Rivian Automotive and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Rivian Automotive and Lindblad Expeditions

Given the investment horizon of 90 days Rivian Automotive is expected to generate 1.45 times more return on investment than Lindblad Expeditions. However, Rivian Automotive is 1.45 times more volatile than Lindblad Expeditions Holdings. It trades about 0.01 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about -0.07 per unit of risk. If you would invest  1,223  in Rivian Automotive on November 29, 2024 and sell it today you would lose (63.00) from holding Rivian Automotive or give up 5.15% of portfolio value over 90 days.

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

Rivian Automotive  vs.  Lindblad Expeditions Holdings

Rivian Automotive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rivian Automotive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Rivian Automotive is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Rivian Automotive and Lindblad Expeditions

The main advantage of trading using opposite Rivian Automotive and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivian Automotive 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 Rivian Automotive 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.