Correlation Between Lindblad Expeditions and Caesars Entertainment

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

Diversification Opportunities for Lindblad Expeditions and Caesars Entertainment

-0.35

Correlation Coefficient

Lindblad Expeditions  Caesars Entertainment

Very good diversification

The 3 months correlation between Lindblad and Caesars is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Caesars Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caesars Entertainment 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 Caesars Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caesars Entertainment has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Caesars Entertainment go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Caesars Entertainment

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to generate 1.78 times more return on investment than Caesars Entertainment. However, Lindblad Expeditions is 1.78 times more volatile than Caesars Entertainment. It trades about 0.12 of its potential returns per unit of risk. Caesars Entertainment is currently generating about 0.05 per unit of risk. If you would invest  954.00  in Lindblad Expeditions Holdings on August 31, 2024 and sell it today you would earn a total of  306.00  from holding Lindblad Expeditions Holdings or generate 32.08% return on investment over 90 days.

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

Lindblad Expeditions Holdings  vs.  Caesars Entertainment

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.

Caesars Entertainment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caesars Entertainment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Caesars Entertainment may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Lindblad Expeditions and Caesars Entertainment

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

The idea behind Lindblad Expeditions Holdings and Caesars Entertainment 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.