Correlation Between Carnival and BT Brands
Can any of the company-specific risk be diversified away by investing in both Carnival and BT Brands 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 Carnival and BT Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnival and BT Brands Warrant, you can compare the effects of market volatilities on Carnival and BT Brands 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 Carnival with a short position of BT Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival and BT Brands.
Diversification Opportunities for Carnival and BT Brands
Very good diversification
The 3 months correlation between Carnival and BTBDW is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Carnival and BT Brands Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BT Brands Warrant and Carnival 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 Carnival are associated (or correlated) with BT Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BT Brands Warrant has no effect on the direction of Carnival i.e., Carnival and BT Brands go up and down completely randomly.
Pair Corralation between Carnival and BT Brands
Considering the 90-day investment horizon Carnival is expected to generate 49.13 times less return on investment than BT Brands. But when comparing it to its historical volatility, Carnival is 18.16 times less risky than BT Brands. It trades about 0.07 of its potential returns per unit of risk. BT Brands Warrant is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 7.93 in BT Brands Warrant on October 20, 2024 and sell it today you would earn a total of 1.07 from holding BT Brands Warrant or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 70.0% |
| Values | Daily Returns |
Carnival vs. BT Brands Warrant
Performance |
| Timeline |
| Carnival |
| BT Brands Warrant |
Carnival and BT Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival and BT Brands
The main advantage of trading using opposite Carnival and BT Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival position performs unexpectedly, BT Brands 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 BT Brands will offset losses from the drop in BT Brands' long position.| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |