Correlation Between ELDORADO and Lindblad Expeditions

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

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

Diversification Opportunities for ELDORADO and Lindblad Expeditions

-0.3

Correlation Coefficient

ELDORADO  Lindblad Expeditions

Very good diversification

The 3 months correlation between ELDORADO and Lindblad is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ELDORADO RESORTS INC and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and ELDORADO 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 ELDORADO RESORTS INC 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 ELDORADO i.e., ELDORADO and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between ELDORADO and Lindblad Expeditions

Assuming the 90 days trading horizon ELDORADO RESORTS INC is expected to generate 11.13 times more return on investment than Lindblad Expeditions. However, ELDORADO is 11.13 times more volatile than Lindblad Expeditions Holdings. It trades about 0.04 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about 0.02 per unit of risk. If you would invest  10,113  in ELDORADO RESORTS INC on September 19, 2024 and sell it today you would earn a total of  122.00  from holding ELDORADO RESORTS INC or generate 1.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.05%
Values	Daily Returns

ELDORADO RESORTS INC  vs.  Lindblad Expeditions Holdings

ELDORADO RESORTS INC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ELDORADO RESORTS INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ELDORADO is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lindblad Expeditions

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 4 (%) 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.

Pair Trading with ELDORADO and Lindblad Expeditions

The main advantage of trading using opposite ELDORADO and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELDORADO 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 ELDORADO RESORTS INC 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.