Correlation Between Brinker International and Lindblad Expeditions
Can any of the company-specific risk be diversified away by investing in both Brinker International 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 Brinker International and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on Brinker International 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 Brinker International with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Lindblad Expeditions.
Diversification Opportunities for Brinker International and Lindblad Expeditions
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brinker and Lindblad is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Brinker 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 Brinker International 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 Brinker 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 Brinker International i.e., Brinker International and Lindblad Expeditions go up and down completely randomly.
Pair Corralation between Brinker International and Lindblad Expeditions
Considering the 90-day investment horizon Brinker International is expected to generate 0.58 times more return on investment than Lindblad Expeditions. However, Brinker International is 1.71 times less risky than Lindblad Expeditions. It trades about 0.12 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about 0.04 per unit of risk. If you would invest 3,525 in Brinker International on August 30, 2024 and sell it today you would earn a total of 9,544 from holding Brinker International or generate 270.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Lindblad Expeditions Holdings
Performance |
| Timeline |
| Brinker International |
| Lindblad Expeditions |
Brinker International and Lindblad Expeditions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Lindblad Expeditions
The main advantage of trading using opposite Brinker International and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International 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.| Brinker International vs. Dennys Corp | Brinker International vs. Bloomin Brands | Brinker International vs. Jack In The | Brinker International vs. Dine Brands Global |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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