Correlation Between Airbnb and Royal Caribbean
Can any of the company-specific risk be diversified away by investing in both Airbnb and Royal Caribbean 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 Airbnb and Royal Caribbean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbnb Inc and Royal Caribbean Cruises, you can compare the effects of market volatilities on Airbnb and Royal Caribbean 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 Airbnb with a short position of Royal Caribbean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbnb and Royal Caribbean.
Diversification Opportunities for Airbnb and Royal Caribbean
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Airbnb and Royal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Airbnb Inc and Royal Caribbean Cruises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Caribbean Cruises and Airbnb 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 Airbnb Inc are associated (or correlated) with Royal Caribbean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Caribbean Cruises has no effect on the direction of Airbnb i.e., Airbnb and Royal Caribbean go up and down completely randomly.
Pair Corralation between Airbnb and Royal Caribbean
Given the investment horizon of 90 days Airbnb is expected to generate 4.36 times less return on investment than Royal Caribbean. In addition to that, Airbnb is 1.06 times more volatile than Royal Caribbean Cruises. It trades about 0.03 of its total potential returns per unit of risk. Royal Caribbean Cruises is currently generating about 0.13 per unit of volatility. If you would invest 7,131 in Royal Caribbean Cruises on November 1, 2024 and sell it today you would earn a total of 19,778 from holding Royal Caribbean Cruises or generate 277.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airbnb Inc vs. Royal Caribbean Cruises
Performance |
| Timeline |
| Airbnb Inc |
| Royal Caribbean Cruises |
Airbnb and Royal Caribbean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airbnb and Royal Caribbean
The main advantage of trading using opposite Airbnb and Royal Caribbean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbnb position performs unexpectedly, Royal Caribbean 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 Royal Caribbean will offset losses from the drop in Royal Caribbean's long position.| Airbnb vs. Norwegian Cruise Line | Airbnb vs. Royal Caribbean Cruises | Airbnb vs. Expedia Group | Airbnb vs. Booking Holdings |
| Royal Caribbean vs. Carnival | Royal Caribbean vs. Airbnb Inc | Royal Caribbean vs. Expedia Group | Royal Caribbean vs. Booking Holdings |
Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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