Correlation Between Scientific and Lindblad Expeditions

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

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

Diversification Opportunities for Scientific and Lindblad Expeditions

0.54

Correlation Coefficient

Scientific  Lindblad Expeditions

Very weak diversification

The 3 months correlation between Scientific and Lindblad is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games International and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Scientific 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 Scientific Games International 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 Scientific i.e., Scientific and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Scientific and Lindblad Expeditions

Assuming the 90 days trading horizon Scientific Games International is expected to generate 0.1 times more return on investment than Lindblad Expeditions. However, Scientific Games International is 10.1 times less risky than Lindblad Expeditions. It trades about 0.01 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about -0.06 per unit of risk. If you would invest  10,220  in Scientific Games International on December 26, 2024 and sell it today you would earn a total of  15.00  from holding Scientific Games International or generate 0.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.08%
Values	Daily Returns

Scientific Games International  vs.  Lindblad Expeditions Holdings

Scientific Games Int

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scientific Games International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Scientific is not utilizing all of its potentials. The recent stock price disturbance, 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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Scientific and Lindblad Expeditions

The main advantage of trading using opposite Scientific and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific 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 Scientific Games International 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.