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 Holding 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
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amadeus and Carnival is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Holding 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 Holding 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 Holding is expected to under-perform the Carnival. But the pink sheet apears to be less risky and, when comparing its historical volatility, Amadeus IT Holding is 1.84 times less risky than Carnival. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Carnival is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,216 in Carnival on August 31, 2024 and sell it today you would earn a total of 298.00 from holding Carnival or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amadeus IT Holding vs. Carnival
Performance |
| Timeline |
| Amadeus IT Holding |
| 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. Arma Services | Amadeus IT vs. Yatra Online | Amadeus IT vs. MakeMyTrip Limited | Amadeus IT vs. Tuniu Corp |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |