Correlation Between Lindblad Expeditions and Delek Logistics

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

Diversification Opportunities for Lindblad Expeditions and Delek Logistics

-0.24

Correlation Coefficient

Lindblad Expeditions  Delek Logistics

Very good diversification

The 3 months correlation between Lindblad and Delek is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Delek Logistics Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Logistics Partners 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 Delek Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Logistics Partners has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Delek Logistics go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Delek Logistics

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to generate 8.37 times more return on investment than Delek Logistics. However, Lindblad Expeditions is 8.37 times more volatile than Delek Logistics Partners. It trades about 0.29 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.4 per unit of risk. If you would invest  940.00  in Lindblad Expeditions Holdings on September 2, 2024 and sell it today you would earn a total of  386.00  from holding Lindblad Expeditions Holdings or generate 41.06% 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.  Delek Logistics Partners

Lindblad Expeditions

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Lindblad Expeditions exhibited solid returns over the last few months and may actually be approaching a breakup point.

Delek Logistics Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delek Logistics Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Delek Logistics is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Lindblad Expeditions and Delek Logistics

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

The idea behind Lindblad Expeditions Holdings and Delek Logistics Partners 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.