Correlation Between Lindblad Expeditions and Brunswick

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

Diversification Opportunities for Lindblad Expeditions and Brunswick

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Lindblad and Brunswick is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and Lindblad Expeditions 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 Lindblad Expeditions Holdings are associated (or correlated) with Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Brunswick go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Brunswick

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to under-perform the Brunswick. In addition to that, Lindblad Expeditions is 1.64 times more volatile than Brunswick. It trades about -0.02 of its total potential returns per unit of risk. Brunswick is currently generating about 0.16 per unit of volatility. If you would invest  8,475  in Brunswick on December 29, 2023 and sell it today you would earn a total of  1,096  from holding Brunswick or generate 12.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Lindblad Expeditions Holdings  vs.  Brunswick

 Performance 
       Timeline  
Lindblad Expeditions 

Risk-Adjusted Performance

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

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Brunswick has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Brunswick is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Lindblad Expeditions and Brunswick Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lindblad Expeditions and Brunswick

The main advantage of trading using opposite Lindblad Expeditions and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindblad Expeditions position performs unexpectedly, Brunswick 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 Brunswick will offset losses from the drop in Brunswick's long position.
The idea behind Lindblad Expeditions Holdings and Brunswick 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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