Correlation Between Lindblad Expeditions and Mesa Air

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

Diversification Opportunities for Lindblad Expeditions and Mesa Air

-0.5

Correlation Coefficient

Lindblad Expeditions  Mesa Air

Very good diversification

The 3 months correlation between Lindblad and Mesa is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lindblad Expeditions Holdings and Mesa Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Air 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 Mesa Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Air Group has no effect on the direction of Lindblad Expeditions i.e., Lindblad Expeditions and Mesa Air go up and down completely randomly.

Pair Corralation between Lindblad Expeditions and Mesa Air

Given the investment horizon of 90 days Lindblad Expeditions Holdings is expected to under-perform the Mesa Air. But the stock apears to be less risky and, when comparing its historical volatility, Lindblad Expeditions Holdings is 1.33 times less risky than Mesa Air. The stock trades about -0.17 of its potential returns per unit of risk. The Mesa Air Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  88.00  in Mesa Air Group on September 14, 2024 and sell it today you would earn a total of  19.50  from holding Mesa Air Group or generate 22.16% return on investment over 90 days.

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

Lindblad Expeditions Holdings  vs.  Mesa Air Group

Lindblad Expeditions

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 6 (%) 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.

Mesa Air Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mesa Air Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Lindblad Expeditions and Mesa Air

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

The idea behind Lindblad Expeditions Holdings and Mesa Air 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.