Correlation Between Carnival Plc and Shimano
Can any of the company-specific risk be diversified away by investing in both Carnival Plc and Shimano 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 Shimano 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 Shimano Inc ADR, you can compare the effects of market volatilities on Carnival Plc and Shimano 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 Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival Plc and Shimano.
Diversification Opportunities for Carnival Plc and Shimano
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carnival and Shimano is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Carnival Plc ADS and Shimano Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano Inc ADR 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano Inc ADR has no effect on the direction of Carnival Plc i.e., Carnival Plc and Shimano go up and down completely randomly.
Pair Corralation between Carnival Plc and Shimano
Considering the 90-day investment horizon Carnival Plc ADS is expected to generate 1.58 times more return on investment than Shimano. However, Carnival Plc is 1.58 times more volatile than Shimano Inc ADR. It trades about 0.09 of its potential returns per unit of risk. Shimano Inc ADR is currently generating about -0.02 per unit of risk. If you would invest 1,348 in Carnival Plc ADS on August 26, 2024 and sell it today you would earn a total of 904.00 from holding Carnival Plc ADS or generate 67.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnival Plc ADS vs. Shimano Inc ADR
Performance |
| Timeline |
| Carnival Plc ADS |
| Shimano Inc ADR |
Carnival Plc and Shimano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival Plc and Shimano
The main advantage of trading using opposite Carnival Plc and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival Plc position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano's long position.| Carnival Plc vs. Yatra Online | Carnival Plc vs. Mondee Holdings | Carnival Plc vs. Tuniu Corp | Carnival Plc vs. TripAdvisor |
| Shimano vs. Callaway Golf | Shimano vs. Peloton Interactive | Shimano vs. BANDAI NAMCO Holdings | Shimano vs. Nikon Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |