Correlation Between Global Net and Lindblad Expeditions

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

Diversification Opportunities for Global Net and Lindblad Expeditions

GlobalLindbladDiversified AwayGlobalLindbladDiversified Away100%
-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between Global and Lindblad is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Global Net 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 Global Net Lease 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 Global Net i.e., Global Net and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Global Net and Lindblad Expeditions

Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the Lindblad Expeditions. But the stock apears to be less risky and, when comparing its historical volatility, Global Net Lease is 3.06 times less risky than Lindblad Expeditions. The stock trades about -0.11 of its potential returns per unit of risk. The Lindblad Expeditions Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,145  in Lindblad Expeditions Holdings on November 23, 2024 and sell it today you would earn a total of  146.00  from holding Lindblad Expeditions Holdings or generate 12.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Global Net Lease  vs.  Lindblad Expeditions Holdings

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15GNL-PD LIND
       Timeline  
Global Net Lease 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Global Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Global Net is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb21.52222.52323.5
Lindblad Expeditions 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Over the last 90 days Lindblad Expeditions Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1111.51212.51313.514

Global Net and Lindblad Expeditions Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.5-3.37-2.24-1.110.01.12.253.394.535.67 0.050.100.150.20
JavaScript chart by amCharts 3.21.15GNL-PD LIND
       Returns  

Pair Trading with Global Net and Lindblad Expeditions

The main advantage of trading using opposite Global Net and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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 Global Net Lease 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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