Correlation Between Olympic Steel and Lindblad Expeditions
Can any of the company-specific risk be diversified away by investing in both Olympic Steel 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 Olympic Steel and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympic Steel and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on Olympic Steel 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 Olympic Steel with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Steel and Lindblad Expeditions.
Diversification Opportunities for Olympic Steel and Lindblad Expeditions
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Olympic and Lindblad is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Steel and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Olympic Steel 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 Olympic Steel 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 Olympic Steel i.e., Olympic Steel and Lindblad Expeditions go up and down completely randomly.
Pair Corralation between Olympic Steel and Lindblad Expeditions
Given the investment horizon of 90 days Olympic Steel is expected to generate 3.3 times less return on investment than Lindblad Expeditions. But when comparing it to its historical volatility, Olympic Steel is 1.6 times less risky than Lindblad Expeditions. It trades about 0.08 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 925.00 in Lindblad Expeditions Holdings on August 29, 2024 and sell it today you would earn a total of 298.50 from holding Lindblad Expeditions Holdings or generate 32.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympic Steel vs. Lindblad Expeditions Holdings
Performance |
| Timeline |
| Olympic Steel |
| Lindblad Expeditions |
Olympic Steel and Lindblad Expeditions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympic Steel and Lindblad Expeditions
The main advantage of trading using opposite Olympic Steel and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympic Steel 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.| Olympic Steel vs. Universal Stainless Alloy | Olympic Steel vs. Outokumpu Oyj ADR | Olympic Steel vs. Usinas Siderurgicas de | Olympic Steel vs. POSCO Holdings |
| 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 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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