Correlation Between Western Union and Lindblad Expeditions | WU vs. LIND

Correlation Between Western Union and Lindblad Expeditions

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Can any of the company-specific risk be diversified away by investing in both Western Union 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 Western Union and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on Western Union 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 Western Union with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Lindblad Expeditions.

Diversification Opportunities for Western Union and Lindblad Expeditions

WesternLindbladDiversified AwayWesternLindbladDiversified Away100%
-0.74
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Western and Lindblad is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Western Union 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 Western Union Co 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 Western Union i.e., Western Union and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Western Union and Lindblad Expeditions

Allowing for the 90-day total investment horizon Western Union Co is expected to generate 0.43 times more return on investment than Lindblad Expeditions. However, Western Union Co is 2.35 times less risky than Lindblad Expeditions. It trades about 0.1 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about -0.17 per unit of risk. If you would invest  1,086  in Western Union Co on September 18, 2024 and sell it today you would earn a total of  30.00  from holding Western Union Co or generate 2.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Western Union Co  vs.  Lindblad Expeditions Holdings

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10010203040
JavaScript chart by amCharts 3.21.15WU LIND
       Timeline  
Western Union 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Western Union Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Western Union is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec10.51111.512
Lindblad Expeditions 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec91011121314

Western Union and Lindblad Expeditions Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.15-1.62-1.09-0.56-0.04480.440.971.52.032.56 0.050.100.150.20
JavaScript chart by amCharts 3.21.15WU LIND
       Returns  

Pair Trading with Western Union and Lindblad Expeditions

The main advantage of trading using opposite Western Union and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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 Western Union Co 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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