Correlation Between Carnival Plc and Mattel
Can any of the company-specific risk be diversified away by investing in both Carnival Plc and Mattel 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 Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnival plc and Mattel Inc, you can compare the effects of market volatilities on Carnival Plc and Mattel 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 Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival Plc and Mattel.
Diversification Opportunities for Carnival Plc and Mattel
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carnival and Mattel is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Carnival plc and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc 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 are associated (or correlated) with Mattel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mattel Inc has no effect on the direction of Carnival Plc i.e., Carnival Plc and Mattel go up and down completely randomly.
Pair Corralation between Carnival Plc and Mattel
Assuming the 90 days horizon Carnival plc is expected to generate 2.49 times more return on investment than Mattel. However, Carnival Plc is 2.49 times more volatile than Mattel Inc. It trades about 0.07 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.01 per unit of risk. If you would invest 1,073 in Carnival plc on August 31, 2024 and sell it today you would earn a total of 1,277 from holding Carnival plc or generate 119.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Carnival plc vs. Mattel Inc
Performance |
| Timeline |
| Carnival plc |
| Mattel Inc |
Carnival Plc and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival Plc and Mattel
The main advantage of trading using opposite Carnival Plc and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival Plc position performs unexpectedly, Mattel 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 Mattel will offset losses from the drop in Mattel's long position.| Carnival Plc vs. American Outdoor Brands | Carnival Plc vs. Acushnet Holdings Corp | Carnival Plc vs. Mattel Inc | Carnival Plc vs. Bowlero Corp |
| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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