Correlation Between Aluminumof China and Lindblad Expeditions
Can any of the company-specific risk be diversified away by investing in both Aluminumof China 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 Aluminumof China and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on Aluminumof China 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 Aluminumof China with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Lindblad Expeditions.
Diversification Opportunities for Aluminumof China and Lindblad Expeditions
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aluminumof and Lindblad is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Aluminumof China 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 Aluminum of 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 Aluminumof China i.e., Aluminumof China and Lindblad Expeditions go up and down completely randomly.
Pair Corralation between Aluminumof China and Lindblad Expeditions
Assuming the 90 days horizon Aluminum of is expected to generate 1.32 times more return on investment than Lindblad Expeditions. However, Aluminumof China is 1.32 times more volatile than Lindblad Expeditions Holdings. It trades about 0.06 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 45.00 in Aluminum of on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Aluminum of or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.5% |
| Values | Daily Returns |
Aluminum of vs. Lindblad Expeditions Holdings
Performance |
| Timeline |
| Aluminumof China |
| Lindblad Expeditions |
Aluminumof China and Lindblad Expeditions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and Lindblad Expeditions
The main advantage of trading using opposite Aluminumof China and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China 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.| Aluminumof China vs. Air China Limited | Aluminumof China vs. COSCO SHIPPING Holdings | Aluminumof China vs. Zijin Mining Group | Aluminumof China vs. Bank of China |
| Lindblad Expeditions vs. Yatra Online | Lindblad Expeditions vs. Despegar Corp | Lindblad Expeditions vs. MakeMyTrip Limited | Lindblad Expeditions vs. Tuniu Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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