Correlation Between Carnival Plc and Carnival
Can any of the company-specific risk be diversified away by investing in both Carnival Plc 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 Carnival Plc and Carnival into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnival Plc ADS and Carnival, you can compare the effects of market volatilities on Carnival Plc 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 Carnival Plc with a short position of Carnival. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival Plc and Carnival.
Diversification Opportunities for Carnival Plc and Carnival
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Carnival and Carnival is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Carnival Plc ADS and Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival and Carnival Plc 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 Plc ADS 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 Carnival Plc i.e., Carnival Plc and Carnival go up and down completely randomly.
Pair Corralation between Carnival Plc and Carnival
Considering the 90-day investment horizon Carnival Plc is expected to generate 1.04 times less return on investment than Carnival. But when comparing it to its historical volatility, Carnival Plc ADS is 1.07 times less risky than Carnival. It trades about 0.3 of its potential returns per unit of risk. 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 Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnival Plc ADS vs. Carnival
Performance |
| Timeline |
| Carnival Plc ADS |
| Carnival |
Carnival Plc and Carnival Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival Plc and Carnival
The main advantage of trading using opposite Carnival Plc and Carnival positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival Plc 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.| Carnival Plc vs. Callaway Golf | Carnival Plc vs. Peloton Interactive | Carnival Plc vs. Vista Outdoor | Carnival Plc vs. Clarus 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |