Correlation Between Gan and Royal Caribbean
Can any of the company-specific risk be diversified away by investing in both Gan and Royal Caribbean 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 Gan and Royal Caribbean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gan and Royal Caribbean Cruises, you can compare the effects of market volatilities on Gan and Royal Caribbean 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 Gan with a short position of Royal Caribbean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gan and Royal Caribbean.
Diversification Opportunities for Gan and Royal Caribbean
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gan and Royal is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gan and Royal Caribbean Cruises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Caribbean Cruises and Gan 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 Gan are associated (or correlated) with Royal Caribbean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Caribbean Cruises has no effect on the direction of Gan i.e., Gan and Royal Caribbean go up and down completely randomly.
Pair Corralation between Gan and Royal Caribbean
Considering the 90-day investment horizon Gan is expected to generate 1.63 times less return on investment than Royal Caribbean. But when comparing it to its historical volatility, Gan is 1.41 times less risky than Royal Caribbean. It trades about 0.15 of its potential returns per unit of risk. Royal Caribbean Cruises is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 14,978 in Royal Caribbean Cruises on August 24, 2024 and sell it today you would earn a total of 8,779 from holding Royal Caribbean Cruises or generate 58.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Gan vs. Royal Caribbean Cruises
Performance |
| Timeline |
| Gan |
| Royal Caribbean Cruises |
Gan and Royal Caribbean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gan and Royal Caribbean
The main advantage of trading using opposite Gan and Royal Caribbean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gan position performs unexpectedly, Royal Caribbean 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 Royal Caribbean will offset losses from the drop in Royal Caribbean's long position.| Gan vs. Rush Street Interactive | Gan vs. Inspired Entertainment | Gan vs. PointsBet Holdings Limited | Gan vs. PlayAGS |
| Royal Caribbean vs. Carnival | Royal Caribbean vs. Airbnb Inc | Royal Caribbean vs. Expedia Group | Royal Caribbean 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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