Correlation Between Dave and Lindblad Expeditions

Can any of the company-specific risk be diversified away by investing in both Dave 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 Dave and Lindblad Expeditions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dave Inc and Lindblad Expeditions Holdings, you can compare the effects of market volatilities on Dave 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 Dave with a short position of Lindblad Expeditions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave and Lindblad Expeditions.

Diversification Opportunities for Dave and Lindblad Expeditions

-0.54

Correlation Coefficient

Dave  Lindblad Expeditions

Excellent diversification

The 3 months correlation between Dave and Lindblad is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dave Inc and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions and Dave 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 Dave Inc 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 Dave i.e., Dave and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Dave and Lindblad Expeditions

Given the investment horizon of 90 days Dave Inc is expected to generate 1.75 times more return on investment than Lindblad Expeditions. However, Dave is 1.75 times more volatile than Lindblad Expeditions Holdings. It trades about 0.15 of its potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about -0.01 per unit of risk. If you would invest  529.00  in Dave Inc on January 19, 2024 and sell it today you would earn a total of  2,882  from holding Dave Inc or generate 544.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dave Inc  vs.  Lindblad Expeditions Holdings

Dave Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dave Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Dave exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lindblad Expeditions

Risk-Adjusted Performance

0 of 100

Very Weak

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 fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Dave and Lindblad Expeditions

The main advantage of trading using opposite Dave and Lindblad Expeditions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave 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 Dave Inc 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.