Correlation Between Carnival Plc and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Carnival Plc and Games Workshop 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 Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnival plc and Games Workshop Group, you can compare the effects of market volatilities on Carnival Plc and Games Workshop 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 Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival Plc and Games Workshop.
Diversification Opportunities for Carnival Plc and Games Workshop
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Carnival and Games is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Carnival plc and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group 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 Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of Carnival Plc i.e., Carnival Plc and Games Workshop go up and down completely randomly.
Pair Corralation between Carnival Plc and Games Workshop
Assuming the 90 days trading horizon Carnival plc is expected to generate 1.27 times more return on investment than Games Workshop. However, Carnival Plc is 1.27 times more volatile than Games Workshop Group. It trades about 0.16 of its potential returns per unit of risk. Games Workshop Group is currently generating about 0.12 per unit of risk. If you would invest 1,403 in Carnival plc on August 29, 2024 and sell it today you would earn a total of 1,036 from holding Carnival plc or generate 73.84% 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 vs. Games Workshop Group
Performance |
| Timeline |
| Carnival plc |
| Games Workshop Group |
Carnival Plc and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival Plc and Games Workshop
The main advantage of trading using opposite Carnival Plc and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival Plc position performs unexpectedly, Games Workshop 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 Games Workshop will offset losses from the drop in Games Workshop's long position.| Carnival Plc vs. VULCAN MATERIALS | Carnival Plc vs. Hyster Yale Materials Handling | Carnival Plc vs. Consolidated Communications Holdings | Carnival Plc vs. Highlight Communications AG |
| Games Workshop vs. QBE Insurance Group | Games Workshop vs. Ameriprise Financial | Games Workshop vs. HANOVER INSURANCE | Games Workshop vs. Siamgas And Petrochemicals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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