Correlation Between FAT Brands and Lindblad Expeditions
Can any of the company-specific risk be diversified away by investing in both FAT Brands 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 FAT Brands and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAT Brands and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on FAT Brands 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 FAT Brands with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAT Brands and Lindblad Expeditions.
Diversification Opportunities for FAT Brands and Lindblad Expeditions
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FAT and Lindblad is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding FAT Brands and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and FAT Brands 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 FAT Brands 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 FAT Brands i.e., FAT Brands and Lindblad Expeditions go up and down completely randomly.
Pair Corralation between FAT Brands and Lindblad Expeditions
Considering the 90-day investment horizon FAT Brands is expected to generate 3.3 times less return on investment than Lindblad Expeditions. But when comparing it to its historical volatility, FAT Brands is 1.4 times less risky than Lindblad Expeditions. It trades about 0.02 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 830.00 in Lindblad Expeditions Holdings on August 30, 2024 and sell it today you would earn a total of 430.00 from holding Lindblad Expeditions Holdings or generate 51.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAT Brands vs. Lindblad Expeditions Holdings
Performance |
| Timeline |
| FAT Brands |
| Lindblad Expeditions |
FAT Brands and Lindblad Expeditions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAT Brands and Lindblad Expeditions
The main advantage of trading using opposite FAT Brands and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAT Brands 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.| FAT Brands vs. FAT Brands | FAT Brands vs. Cannae Holdings | FAT Brands vs. Nathans Famous | FAT Brands vs. Dine Brands Global |
| Lindblad Expeditions vs. Yatra Online | Lindblad Expeditions vs. Despegar Corp | Lindblad Expeditions vs. Mondee Holdings | Lindblad Expeditions vs. MakeMyTrip Limited |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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