Correlation Between Lindblad Expeditions and BGC

Can any of the company-specific risk be diversified away by investing in both Lindblad Expeditions and BGC 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 BGC 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 BGC Group, you can compare the effects of market volatilities on Lindblad Expeditions and BGC 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 BGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindblad Expeditions and BGC.

Diversification Opportunities for Lindblad Expeditions and BGC

0.42

Correlation Coefficient

Lindblad Expeditions  BGC

Very weak diversification

The 3 months correlation between Lindblad and BGC is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and BGC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGC Group 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 BGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGC Group has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and BGC go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and BGC

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to generate 2.02 times more return on investment than BGC. However, Lindblad Expeditions is 2.02 times more volatile than BGC Group. It trades about 0.09 of its potential returns per unit of risk. BGC Group is currently generating about 0.06 per unit of risk. If you would invest  734.00  in Lindblad Expeditions Holdings on September 27, 2024 and sell it today you would earn a total of  490.00  from holding Lindblad Expeditions Holdings or generate 66.76% return on investment over 90 days.

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

Lindblad Expeditions Holdings  vs.  BGC Group

Lindblad Expeditions

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Lindblad Expeditions exhibited solid returns over the last few months and may actually be approaching a breakup point.

BGC Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Lindblad Expeditions and BGC

The main advantage of trading using opposite Lindblad Expeditions and BGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindblad Expeditions position performs unexpectedly, BGC 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 BGC will offset losses from the drop in BGC's long position.

The idea behind Lindblad Expeditions Holdings and BGC Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.