Correlation Between Superior Plus and Lindblad Expeditions
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Lindblad Expeditions.
Diversification Opportunities for Superior Plus and Lindblad Expeditions
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Lindblad is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Lindblad Expeditions go up and down completely randomly.
Pair Corralation between Superior Plus and Lindblad Expeditions
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Lindblad Expeditions. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 2.09 times less risky than Lindblad Expeditions. The stock trades about -0.01 of its potential returns per unit of risk. The Lindblad Expeditions Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 675.00 in Lindblad Expeditions Holdings on September 12, 2024 and sell it today you would earn a total of 585.00 from holding Lindblad Expeditions Holdings or generate 86.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Superior Plus Corp vs. Lindblad Expeditions Holdings
Performance |
Timeline |
Superior Plus Corp |
Lindblad Expeditions |
Superior Plus and Lindblad Expeditions Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Superior Plus and Lindblad Expeditions
The main advantage of trading using opposite Superior Plus and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
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Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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