Correlation Between Amadeus IT and Carnival
Can any of the company-specific risk be diversified away by investing in both Amadeus IT and Carnival 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 Amadeus IT and Carnival into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amadeus IT Group and Carnival, you can compare the effects of market volatilities on Amadeus IT and Carnival 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 Amadeus IT with a short position of Carnival. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and Carnival.
Diversification Opportunities for Amadeus IT and Carnival
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amadeus and Carnival is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Group and Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival and Amadeus IT 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 Amadeus IT Group are associated (or correlated) with Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival has no effect on the direction of Amadeus IT i.e., Amadeus IT and Carnival go up and down completely randomly.
Pair Corralation between Amadeus IT and Carnival
Assuming the 90 days horizon Amadeus IT Group is expected to under-perform the Carnival. In addition to that, Amadeus IT is 1.49 times more volatile than Carnival. It trades about -0.11 of its total potential returns per unit of risk. Carnival is currently generating about 0.33 per unit of volatility. If you would invest 2,192 in Carnival on August 27, 2024 and sell it today you would earn a total of 327.00 from holding Carnival or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amadeus IT Group vs. Carnival
Performance |
| Timeline |
| Amadeus IT Group |
| Carnival |
Amadeus IT and Carnival Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amadeus IT and Carnival
The main advantage of trading using opposite Amadeus IT and Carnival positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT position performs unexpectedly, Carnival 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 Carnival will offset losses from the drop in Carnival's long position.| Amadeus IT vs. SosTravel SPA | Amadeus IT vs. Arma Services | Amadeus IT vs. Transat AT | Amadeus IT vs. Airbnb Inc |
| Carnival vs. Royal Caribbean Cruises | Carnival vs. Airbnb Inc | Carnival vs. Expedia Group | Carnival 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |