Correlation Between Ultra Clean and Lindblad Expeditions

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

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

Diversification Opportunities for Ultra Clean and Lindblad Expeditions

0.79

Correlation Coefficient

Ultra Clean  Lindblad Expeditions

Poor diversification

The 3 months correlation between Ultra and Lindblad is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Ultra Clean 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 Ultra Clean Holdings 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 Ultra Clean i.e., Ultra Clean and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Ultra Clean and Lindblad Expeditions

Assuming the 90 days horizon Ultra Clean Holdings is expected to under-perform the Lindblad Expeditions. In addition to that, Ultra Clean is 1.5 times more volatile than Lindblad Expeditions Holdings. It trades about -0.11 of its total potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about -0.12 per unit of volatility. If you would invest  1,190  in Lindblad Expeditions Holdings on December 21, 2024 and sell it today you would lose (260.00) from holding Lindblad Expeditions Holdings or give up 21.85% of portfolio value over 90 days.

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

Ultra Clean Holdings  vs.  Lindblad Expeditions Holdings

Ultra Clean Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ultra Clean Holdings 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 April 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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ultra Clean and Lindblad Expeditions

The main advantage of trading using opposite Ultra Clean and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean 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 Ultra Clean Holdings 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 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.